Increasing interest in the Instant Asset Write Off
Thanks to changes recently announced by the Australian Government, we’re seeing SMEs increasingly mention the Instant Asset Write Off when requesting finance. Giving small business owners the ability to claim immediate deductions on the full cost of eligible depreciating assets, the Instant Asset Write Off can help small businesses improve cash flow and reduce compliance costs. With a $20,000 threshold applying on a per asset basis, now is a great time to reach out to your clients and see if there’s a way their businesses could benefit from funding for EOFY purchases under the Instant Asset Write Off.
ATO enforcement action being felt by SMEs
The ATO has intensified its efforts to recover unpaid taxes from businesses, reporting that small businesses collectively owe ~$24 billion in collectable debt relating to their business activity statements (BAS). This latest crackdown aims recover outstanding debts that have accumulated in the post-pandemic era. With access to both secured and unsecured business finance options to help consolidate or pay off debt, we’re able to assist with any of your client’s debt liabilities.
Limited support for SMEs in Budget announcement
The recent budget announcement disappointed many small businesses, offering limited direct financial support for the sector amidst uncertain economic conditions. Despite providing extensions to the Energy Bill Relief Fund and the Instant Asset Write Off, little else was announced in terms of new and more substantial initiatives for SMEs. As a result, many SMEs will likely need to rely on financing options to fund their operations and growth initiatives in FY24/25.
Growing adoption of EVs & PHEVs
Late last year, the Federal Government announced fringe benefits tax exemptions on EVs, whilst also recently pledging to implement the country’s own fuel efficiency standards. With the rollout of charging infrastructure as part of the National EV Charging Network, as well as the $500m Driving the Nation Fund we’re seeing a growing adoption of electric vehicles among self-employed customers. Many lenders have taken note of this, and are currently offering competitive rates for EVs and PHEVs (Plug-In Hybrid Vehicles) this EOFY.
Economic Outlook
In April, SME confidence rose significantly, as economic indicators showed ongoing recovery from last year’s challenges. The unemployment rate dropped by 0.5%, indicating better labour market conditions. Additionally, consumer spending increased by 1.2%, benefiting SMEs across various sectors. With this in mind, we recommend reaching out to your clients to see how they’re placed with finance they may need for any upcoming purchases before the financial year deadline.
