Business has certainly been deluged with offers, options and opportunities of support throughout the coronavirus pandemic. First it was the stimulus measures in March/April, then there were the recovery plans, then came the Federal Budget in October followed closely by the November RBA rate cuts and the State and Territory budgets to round out a very busy year.
Having the time and capacity to make the most of what’s available to you and how you can make it all work for you in acquiring new equipment can be a challenge. Identifying what comes to you automatically as a business, knowing what you have to apply for in order to receive and what you have to use your own initiative to benefit from.
At Jade we’ve stayed across the situation and brought you resources and assistance in explaining individual measures and announcements. Now we’re bringing it in, make the connections between what’s on offer and how you can make it work with your equipment finance deals to achieve benefits for your business.
Overview
- The Federal Government controls issues in relation to taxation policy which include the accelerated depreciation measures such as Instant Asset Write-Off and temporary full expensing and policies including temporary loss carry back. These you have to use your own initiative and action to derive a benefit.
- The Feds are also introducing significant support for their 6 priority sectors as we covered in earlier articles. Most of these measures involve grants to business which you need to apply for.
- The wage subsidy scheme was also introduced and this would require paperwork to apply for while the individual personal income tax cuts happen automatically when you implement the new tax schedules.
- The states and territories focussed on business support by way of payroll tax relief which is in their domain. The waivers and deferrals will come into play when you submit your next payroll tax return. If eligible, this can result in less costs for your business and therefore, greater capacity to invest in new equipment.
- The states and territories are also spending their own money on major infrastructure and other projects which may present business opportunities for you. These you will need to seek out, usually through the government tender scheme or via your existing customers. There may also be flow-on effects to your operation.
- Several states are also offering small business grants which you would need to apply for. Some are sector-specific, some more general. Details of these should be available on the state treasury or business website.
- Some states, notably WA, TAS and NSW are offering vouchers to consumers to spend on dining, entertainment and some travel. Businesses that wish to accept these vouchers and receive the boost to income would need to register with the relevant state authority. More income means improved cash flow which can free up funds for investing in new equipment.
Rate Cut Impacts
The RBA’s cut to the official cash rate essentially means interest rate cuts. The banks and other lenders can pay less to access their funds so they can charge you less to borrow it. This cut will not impact existing Jade deals which we have arranged on fixed interest rates.
If you have existing loans that were established several years ago at much higher rates, speak with Jade about the options around refinancing at the current lower rates. This may also involve restructuring your finance deals by rolling several loans into one package to relieve pressure on cash flow in this more difficult economic climate.
Jade Equipment Finance always sources the cheapest interest rates for our customers and this should result in cheaper rates for our equipment finance deals. As we are accredited with many lenders, we have the connections to source which lenders are offering the best deals for your specific sector.
Securing Cheap Interest Rate Equipment Finance
Many businesses are keen to take advantage of what’s on offer, especially in regard to IAWO and temporary full expensing, to upgrade and replace their existing equipment fleet. These measures require using a finance product where the asset is listed on the business balance sheet so it can be depreciated or written-off or fully expended.
Jade provides Chattel Mortgage as the most appropriate loan for this purpose. Despite the sometimes confusing name, this loan is relatively straight forward in structure. Jade arranges the finance at a fixed cheap interest rate, over a fixed term, with fixed repayments and the option of a balloon. The borrower business has full use and ownership of the equipment from day 1 and the lender takes a mortgage over the asset. Mortgage meaning, the equipment is used as security against the loan. Banks are tending to refer to this type of finance more simply as Equipment Loan.
We have lenders that specialise exclusively in equipment finance and their deeper understanding of key industry sectors tends to make them more flexible and versatile when offering loan deals. That combined with Jade’s expertise in negotiating on interest rates and loan conditions can result in cheaper finance for our customers.
So that’s a brief ‘bringing it all’ in snapshot of some of the measures, policies and programs currently on offer to business. Speak with our Jade finance consultants about how we can make it all work for your business with the purchase of new equipment.
To discuss equipment finance options, contact Jade Equipment Finance on 1300 000 003
DISCLAIMER: ALL INFORMATION PROVIDED IN THIS ARTICLE IS INTENDED AS GENERAL INFORMATION PURPOSES AND NOT AS AN EXCLUSIVE OR SOLE SOURCE FOR MAKING FINANCIAL DECISIONS. INDIVIDUALS SHOULD SOURCE INDEPENDENT ADVICE FROM A FINANCIAL ADVISOR IF THEY REQUIRE SPECIFIC DIRECTION IN RELATION TO THEIR CIRCUMSTANCES. CONTENT MATERIAL, DATA, SPECIFICS, PRODUCT FEATURES AND OTHER INFORMATION IS SOURCED FROM A RANGE OF SOURCES AND NO LIABILITY IS ACCEPTED FOR ERRORS OR MISINTERPRETATIONS OF SUCH DATA.
