Government Announcement In Relation to Post JobKeeper Assistance
On Thursday 11th March the Australian government announced various post JobKeeper assistance programs as follows:
SME Loan Guarantee Scheme
This will be extended and expanded to support up to $40 billion in lending to small and medium sized enterprises. The scheme will be targeted and tailored to support those businesses that have been relying on JobKeeper during the March 2021 quarter. The announcement indicates that this new scheme is only open to recipients of the JobKeeper payment between 4th January 2021 and 28th March 2021. Phase 2 of the existing SME Loan Guarantee Scheme will remain open to eligible borrowers until 30th June 2021. Details of the loan are as follows:
- To be eligible for this new loan scheme, businesses must have a turnover under $250 million per annum.
- Loans will be open to companies, self-employed individuals, partnerships and non-profit businesses.
- The loans are being supplied by banks with funds provided by the Federal government.
- The Federal government will guarantee 80% of the loan amount.
- Lenders are allowed to offer borrowers a repayment holiday of up to 24 months.
- Loans can be used for a broad range of business purposes, including to support investment, loans may be used to refinance any pre-existing debt of an eligible borrower.
- Borrowers can access up to $5 million in total.
- Loans are for terms of up to 10 years.
- Loans can be either unsecured or secured (excluding residential property).
- The interest rate on loans will be determined by lenders, but will be capped at around 7.5% with some flexibility for interest rates on variable rate loans to increase, if market interest rates rise over time. It is expected that normal bank lending requirements will apply for these new loans.
- Businesses will probably need interim financial accounts to 31st December 2020 and a Business Plan as part of the supporting information that the bank will require.
If you are interested in submitting a loan application and you require our assistance, please do not hesitate to contact us.
Business Events Grants Program
This will be extended by 3 months to support businesses to hold multi-day business events covering up to 50% of costs incurred in participating business events during the 2021 calendar year.
The minimum grant amount will be $5,000 to allow smaller businesses the opportunity to apply.
The support will be available for events scheduled through to 31st March 2022.
Applications for the grant will be extended to 30th June 2021.
Expressions of interest for event owners to have their event included on the schedule of approved business events will reopen in April.
Covid-19 Consumer Travel Support Program
The government has announced Round 2 of this program which will provide further assistance to travel agents and tour arrangement service providers who continue to provide refunds and hold credits for Australian consumers unable to travel internationally.
Zoos and Aquarium Program
There will be an extension to the "Supporting Australia's Exhibiting Zoos and Aquariums Program" for a further 6 months. An updated version of the program guidelines and key dates will be published by the government by the end of March.
Tourism Aviation Network Support
This will operate from April to 30th July 2021 with 50% discounted airline tickets to an initial 13 regions across Australia available on airline websites beginning 1st April 2021. The discounted airfares apply for interstate trips, except for travel from Adelaide to Kangaroo Island.
The destinations announced for discount airfares are:
- Lasseter and Alice Springs
- Whitsundays and Mackay (Proserpine and Hamilton Island)
Research and Development Registration
The due date for companies to lodge their Research and Development Registration Form in respect of the year ended 30th June 2020 is 30th April 2021.
If your company is experiencing difficulties in submitting the application by 30th April 2021, the company can apply for an extension for a maximum of 3 months.
In the application the company must summarise:
· The reasons that the application could not be submitted by the deadline date.
· Provide evidence to support the company's reasons for seeking an extension.
This process will not automatically result in the granting of an extension.
If you're having problems in completing your company's Research and Development Registration Form and you need assistance, please do not hesitate to contact us.
If you have prepared your Budgets and Cashflow Forecast and you believe that you need to increase your business funding, please contact us for a discussion and a review of your options.
You could apply to your bank for an Australian Government Loan via your bank. The loan funds have been supplied by the Australian Government to banks to lend to SMEs. The maximum amount of the grants is $1 million at a low interest rate with repayment to be made over 5 years. These borrowings are 50% guaranteed by the Australian Government. These loans are to be made in accordance with the normal lending practices of the bank.
The loan funds may be spent by the business on any business activity, including capital expenditure and operational expenditure. The availability of these loans ceases from 30th June 2021. An alternative is that the business considers incorporating as a company (if it has not already done so) and attempts to raise capital as a:
- Crowd Sourced Funding Equity Raising Company – a maximum of $5 million may be raised from the public in a 12 month period.
- Early Stage Innovation Company – if the company is under 3 years of age it can raise capital from investors who receive inducements from the Australian Government to invest in companies which meet the definition of being an Early Stage Innovation Company. These inducements include:
- 20% tax rebate based on the amount of investment, up to a maximum rebate for a retail investor of $10,000 and $200,000 for a sophisticated investor.
- Capital gains tax exemption if the shares in the Early Stage Innovation Company are held for longer than 12 months and less than 10 years, there is no capital gains tax payable when the shares are sold. If the shares are held for longer than 10 years the company is revalued at the end of 10 years to establish a "new cost price" for the shareholding.
If you would like to discuss with us any of these funding avenues for your business, please do not hesitate to contact us for a discussion.
Government Grants Can Help
There are hundreds of government grants available in Australia which can assist a business to get properly established. Grants can apply for a wide range of activities including:
· An inventor who is undertaking research and development activities can claim the research and development incentive rebate – for companies with turnover under $20 million the rebate is 43.5% of eligible research and development expenditure.
· When the inventor has completed research and development through to the prototype stage, the business which now has to be a company with annual turnover of less than $20 million, could apply for an Accelerating Commercialisation Grant which is a grant of up to $1 million, on a 50% funding basis, to assist the company to commercialise the prototype into a market that potential customers are happy to purchase.
· An exporter with an annual turnover of less than $50 million can claim an Export Market Development Grant of up to $150,000 as a reimbursement of promotional activities targeted at an overseas market.
· An Australian-based business can also claim the Export Market Development Grant if they are targeting overseas' visitors to deal with their business operations in Australia. This could be an accommodation facility attempting to attract overseas' guests or a white water rafting business trying to attract overseas' customers.
· The Business Improvement Grant is a grant of up to $20,000, funded on a 50% basis, which will assist hundreds of businesses to undertake strategies which will improve the business' performance.
If you would like to discuss any of these grants with us or any of the hundreds of other grants that are available from the Australian, State and Territory Governments, please do not hesitate to contact us.