The key to small business recovery: Cashflow

The COVID-19 pandemic has caused unprecedented levels of disruption and uncertainty for businesses across all sectors and geographies. E&A Advisory teams are working closely with clients to address their individual challenges, including short-term cashflow, debts, tax impacts and accessing government sponsored funding mechanisms, while recommending measures to remain solvent under various scenarios.

The Australian Government has released the Coronavirus SME Guarantee Scheme that provides small and medium sized business with timely access to working capital to help them get through the impact of the Coronavirus.

Under the Scheme, the Government will provide a guarantee of 50 per cent to small and medium enterprise (SME) lenders for new unsecured loans to be used for working capital. This will enhance these lenders’ willingness and ability to provide credit, which will result in SMEs being able to access additional funding to help support them through the upcoming months.

The key points of this Scheme are:

  • Maximum total size of loans of $250,000 per borrower.
  • The loans will be up to 3 years, with an initial 6 month repayment holiday.
  • The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.

Most small businesses are also unaware of the instant tax write-off which is now worth $150,000.

The instant asset write-off allows businesses to buy large items of capital equipment for their business and to obtain an immediate tax deduction for doing so (rather than depreciating the cost over a number of years, as was previously the case).

Business can use the period of ‘hibernation’ to plan for the future and take advantage of an enlarged instant asset write-off.

E&A Advisory can assist with getting the business loan approved from the lending institutions and provide guidance on the asset write-off.

Please call us on 02 8860 9545 or email

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