EOFY alert! Financial year-end is fast approaching
Small business owners wanting to buy a vehicle, asset or important piece of equipment and immediately write off the cost have just over a month to act this financial year.
There’s nothing like an impending deadline to get you moving.
And with June 30 now just over a month away (didn’t that sneak up on us!), time is running out for your business to take advantage of the federal government’s temporary full expensing scheme this financial year.
What is temporary full expensing?
Temporary full expensing is basically an expanded version of the popular instant asset write-off scheme.
It allows businesses that are keen to invest in their future to immediately write off the full value of any eligible depreciable asset purchased, at any cost.
This helps with your cash flow as it allows you to reinvest funds back into your business sooner.
Trucks, coffee machines, excavators, and vehicles are just some examples of assets eligible under the scheme.
There is just one small catch though …
The asset must be installed and ready to use by June 30 in order to be eligible for this financial year.
But rest assured that even if you do order the asset, and then miss the June 30 deadline because it doesn’t arrive in time, you can still write it off next financial year because the scheme is set to run until 30 June 2023.
Asset eligibility
To be eligible for temporary full expensing, the depreciating asset you purchase for your business must be:
New or second-hand (if it’s a second-hand asset, your aggregated turnover must be below $50 million);
First held by you at or after 7.30pm AEDT on 6 October 2020;
First used, or installed ready for use, by you for a taxable purpose (such as a business purpose) by 30 June 2023; and
Used principally in Australia.
Obtaining finance that’s right for your business
Being able to immediately write off assets is one thing, but if you don’t have access to the right kind of finance to purchase them now, the scheme won’t be much use to you this financial year.
So if you’d like help obtaining finance to make the most of temporary full expensing ahead of the impending EOFY deadline, get in touch with us today.
We can help you with financing options that are well suited to your business’s needs now, and into the future.
Talk to our brokers today!
Business Loans: A FAQ for Start-ups and Small Businesses
How to get a business loan?
Do your research: Before you apply for any loan, it's important to do your research and compare interest rates and terms from different lenders. You can use online resources like RateCity or Finder to compare lenders and find the best deal.
Have a strong credit score: Lenders will look at your credit score when they consider your application for a business loan. A good credit score will show that you are a reliable borrower and that you are likely to repay the loan.
Be prepared to provide financial documentation: Lenders will want to see financial documentation when you apply for a business loan. This will help them to assess your ability to repay the loan. Be prepared to provide things like your business tax returns, profit and loss statements, and bank statements.
Have a clear plan for how you will use the loan: Lenders want to know that you have a clear plan for how you will use the loan. They want to make sure that you are not just using it to cover personal expenses. Be prepared to explain how the loan will help you to grow your business.
Consider working with a finance broker: A finance broker can help you find the right business loan for your needs and negotiate with lenders on your behalf. This can save you time and hassle and help you get the best possible interest rate and terms.
How do business loans work?
Business loans are a type of loan that is specifically designed for businesses. They can be used to finance a variety of business expenses, such as purchasing equipment, expanding operations, or covering working capital needs.
Business loans typically have higher interest rates than personal loans, but they may offer longer repayment terms. The terms of a business loan will vary depending on the lender and the borrower's creditworthiness.
How to apply for a business loan?
To apply for a business loan, you will need to provide the lender with certain information, such as your business's financial statements, your personal credit report, and your business plan. You may also need to provide collateral, such as a business asset or personal property.
The lender will then review your application and decide whether to approve your loan. If your loan is approved, you will be required to sign a promissory note, which is a legal document that outlines the terms of your loan.
Can I get a business loan?
Whether or not you can get a business loan will depend on a number of factors, including your business's financial health, your personal credit score, and the lender's requirements.
If you are unsure whether or not you qualify for a business loan, you can speak to our finance brokers. We will be able to assess your situation and give you an idea of your chances of approval.
How much deposit do I need for a business loan?
The amount of deposit you need for a business loan will vary depending on the lender and the type of loan you are applying for. Some lenders may require no deposit, while others may require a deposit of 20% or more.
If you are able to make a larger deposit, you may be able to get a lower interest rate on your loan.
How much credit do I need for a business loan?
The minimum credit score required for a business loan in Australia will vary depending on the lender and the type of loan you are applying for. However, most lenders will require a credit score of at least 600 for a standard business loan. If you have a credit score below 600, you may still be able to get a business loan, but you may have to pay a higher interest rate or provide collateral.
What do you need for a business loan in Australia?
The requirements for a business loan in Australia will vary depending on the lender and the type of loan you are applying for. However, there are some general requirements that you will need to meet in order to be approved for a business loan.
A business plan: A business plan is a document that outlines your business goals, strategies, and financial projections. Lenders will want to see a business plan in order to assess your business's viability and potential for success.
Financial statements: Lenders will want to see your business's financial statements, such as your income statement, balance sheet, and cash flow statement. These statements will help lenders to assess your business's financial health and track record.
Personal credit report: Lenders will also want to see your personal credit report. This report will show your credit history and any outstanding debts.
Collateral: Lenders may require you to provide collateral for your loan. Collateral is an asset that you can pledge to the lender in case you default on your loan.
Good credit score: A good credit score will help you to get approved for a business loan and to get a lower interest rate.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
