Does your small business require a business loan to recover from the COVID-19 downturn?
A recent survey conducted by Officeworks found 82 per cent of small business owners admitted their business is being impacted by COVID-19.
The research undertaken by Officeworks suggests that most of these businesses will be finding new ways to help their business succeed in the second half of the year.
One way will be to take advantage of the Federal Government’s instant asset write-off.
The instant asset tax write off enables small businesses to instantly deduct assets instead of claiming deductions over a number of years. It has been around for a few years, but this year the threshold for the instant asset write-off has increased, with businesses with an annual turnover of up to $500 million able to deduct products up to $150,000. This is a huge uplift from previous years.
Another way is to reduce fees such a tap and go fees by switching to a cheaper debit network.
These business ought to act soon.
Officeworks National Business Manager, Mark Kindness, said “According to our research, almost two in three SBOs have suffered a reduction in revenue with 34 per cent having projects cancelled, 27 per cent making pay cuts and over a quarter downsizing their entire business during the pandemic.
“The events of 2020 mean that, more than ever, small businesses need to leverage the support available to them, including initiatives like the instant asset write-off and make the most of tax-deductible products and purchases before June 30,” he said.
Problematically, only 40 per cent of small business see the end of financial year as a growth opportunity.
These businesses may want to revise their outlook or they could become one of the more than one in six businesses expected to be insolvent when the government’s stimulus package ends in September.
Insolvency experts do expect a flood of businesses to fall off the “September cliff” after the ABS reported 72 per cent of businesses took a hit to revenue as a result of COVID-19.
Other than accessing the instant asset write off, SMEs should look to meet taxation and superannuation obligations and seek professional help from a qualified adviser.
They should also consider a small business loan.
Why you should consider a small business loan?
The economy is reopening and while Victoria is slower than most due to a spike in coronavirus cases, pubs, bars and gyms are now operating, albeit at a much reduced capacity.
This means there are costs to cover including wages, stock purchases and basic utility costs and overheads.
If you are one of the lucky businesses to have survived this period, then it could be worth considering a business loan.
It’s a good time to get one too, as the government’s SME Loan Guarantee Scheme, guarantees 50% of unsecured business loans from eligible lenders until 30 September. SMEs with a turnover of up to $50 million are currently eligible to receive these loans after the Scheme commenced in April 2020.
The Government has approved 41 lenders to participate in the Coronavirus SME Guarantee Scheme.
SMEs can access a range of secured and unsecured business loan products.
Here are InfoChoice’s top five unsecured loans:
Note, interest rates and application fees do vary, so be sure to read the terms and conditions to get the best loan for you.
InfoChoice also compares over 132 secured loans for small businesses: