Top 6 questions we get from clients on COVID-19

Unsurprisingly, we’ve been getting lots of questions from clients on Coronavirus and how it impacts lending. Here are the top six questions we were asked last week.

1. Is it harder to get finance at the moment?

Short answer: yes.

We’re seeing lenders tighten their appetite in line with the economic changes to COVID-19.

This doesn’t mean you won’t be able to get finance, but lenders might require additional documentation before they consider approving your application.

There are Government support measures in place to support SMEs and lenders (more on this below) helping to solve this problem.

2. I haven’t done my March BAS (Business Activity Statement), is there a substitute for it?

If you’re required to lodge a BAS, but haven’t done so for March, there are potential alternatives but these are subject to credit approval.

Three month’s worth of bank statements could be acceptable as a substitute. We can send you a link to retrieve the bank statements needed, if your credit is approved.

3. I’ve heard that taking out a loan in 2020 could benefit me. How?

The Government has increased the threshold for their instant asset write off program.

Previously, you could instantly depreciate eligible assets costing up to $30,000, reducing your tax burden. In response to COVID-19, that figure has temporarily increased to $150,000.

If you’ve been eyeing off a new asset (anything from vehicles and construction equipment to laptops and office supplies) take advantage of the new instant asset write off threshold before 2021.

Don’t have the cash on hand? We can organise equipment finance for you in as little as 24 hours. Even if you have the funds saved up, you might (understandably) be worried about what your business will look like over the next few months. We can help you find a solution to give your business breathing room.

It’s important to note that your business must have an aggregated turnover of less than $500 million (initially this was $50 million) to be eligible for the instant asset write off.

More information can be found here.

4. Are there any other measures in place to support my business through COVID-19?

Yes. A range of Government measures are now in place for eligible businesses to support the economy and keep those in vulnerable positions afloat.

If you employ staff, check out the JobKeeper program. Provided your business is eligible, the JobKeeper can help you retain staff through wage subsidies.

This means, even if your company has to go into hibernation for a while, you can afford to pay your staff and keep them in the books. You’ll be able to claim a payment of $1,500 per employee each fortnight, starting from March 30 2020 (for up to six months).

Some businesses are also eligible for up to $100,000 from the Government to help boost their cash flow, which can help to pay bills, rent and other daily expenses.

For more information on what support measures you could be eligible for, check out our full post on Government support during COVID-19.

5. What is the SME Guarantee Scheme?

The impact of Coronavirus on our economy has created a vicious cycle. Small to medium-sized business owners who need (or would benefit from) finance are having a harder time getting approved.

In response to this issue, the Government has recently passed legislation to help support lenders and in turn, SMEs seeking finance.

Under this scheme, the Government will ‘guarantee’ 50 percent of new loans issued by eligible lenders to SMEs.

More information on the scheme can be found here. Alternatively, a lending expert at Valiant can help you get an application over the line or simply better understand your options during these unique circumstances.

6. Do you work with lenders under the SME Guarantee Scheme?

Yes. The Government is yet to release the full list of ‘approved lenders’, but we are working closely with those who have already been approved.

By working with approved lenders, we hope to support eligible clients in accessing the finance they need. We will continue to build out this specialised panel as we hear more.

Got a question on your mind that we haven’t covered? Contact a lending expert for free. We’d be more than happy to work with you and address your business needs during these uncertain times.