Do you find it difficult to interpret which aspects of the governments May budget are relevant for you and your business? Whilst this can be a challenge for business owners, most understand that the government has made one aspect of Australia’s economy a major priority – growth in small business.
Currently, Australian businesses have a fantastic opportunity to capitalise on a supportive government, low interest rates and a competitive financial services market for growth and innovation. Unfortunately many business owners in Australia find it difficult to accurately interpret the budget in order to make the most of new legislation, tax breaks/incentives and subsidisation packages. It is essential that business owners endeavour to understand the budget, and it is equally essential that business owners are equipped with a sound understanding of the finance options available to them in order to capitalise on the current environment. Without this knowledge businesses are often unable to establish the appropriate facilities that support the growth the government is pushing for.
The government is using phrases like ‘Australia’s engine room’ when describing Australia’s small business sector and has put various measures in place in order to boost growth in this part of our economy. Treasurer Joe Hockey recently said “We recognise that small business, in order to succeed, needs better cash flow and better tools for innovation” (link to article).
The budget has supported Australian SMEs by offering generous tax breaks for small businesses – who can now claim an unlimited number of deductions for items worth less than $20,000. The package stipulates that businesses may claim the expense for almost any item as long as it does not include stock. Additionally the government has cut the company tax rate for those turning over less than $2 mil from 30% to 28.5% and promises $1.8 billion in tax cuts over the next four years.
It is rarely more affordable than it is right now for Australian SMEs to diversify, innovate and ultimately grow. The new budget will go a long way to aiding growth and new ventures for SMEs and it is therefore important that businesses are aware of their options in financing this growth.
Whilst the government has promised to support and subsidise the ultimate cost of investment, business owners are still left with the dilemma of sourcing the funds necessary to pay for such investments.
How can I finance my new purchases?
This budget coincides nicely with the ongoing increase in prevalence of non-bank commercial finance providers in the Australian market. SMEs no longer need to approach a bank with bricks and mortar security in order to establish a business facility that suits their needs. There are a number of alternatives available that provide a flexible facility designed to grow with the business.
Cash flow finance (specifically trade and debtor finance) is becoming a particularly popular choice for Australian businesses. These facilities offer a flexible financial solution for businesses that are looking to grow or simply hoping to mitigate any cash flow difficulties.
Neither trade or debtor finance are likely to require bricks and mortar security. Each facility is secured by your businesses assets. Additionally these facilities are easily scaled to match your businesses financial needs as it grows or contracts. As your businesses increases sales, the receivables balance and stock on hand inflates and you are able to borrow using these assets as security.
The government has made clear the importance of growth in this sector and have put various measures in place to encourage this growth. The combination of the recent budget, record low interest rates and the rise of alternatives to bricks and mortar based business lending has given rise to a very comfortable environment for Australia’s SMEs to grow.
Moneytech is an Australian commercial finance organisation specialising in Trade Finance (Credit Express) and Debtor Finance (Confirmed Capital). We aspire to become trusted partners of our customers. We support their growth by both understanding their business, and creating innovative financial products based on their feedback which fulfils their needs. Continue to our web site to learn more, or call us on 1300 858 904.