Can you still apply for stimulus relief as a business owner?

In a word, yes. The Australian government still has several different schemes available to assist business owners impacted by the ongoing COVID-19 pandemic. While some of these programs have changed their specific benefits as the pandemic has continued, almost all are still on the books for eligible business owners to take advantage of. Some of the most important parts of the country's continued economic response include:

JobKeeper

The JobKeeper scheme is designed to ensure employers are able to continue paying their employees wages even while facing a potential loss of profits as a result of the pandemic. The program pays out each fortnight.

While the initiative had been set to expire over the summer, the Australian government announced an extension until 28 March 2021, citing the continued impact of the pandemic. With the extension, some of the specifics of the program have changed. Starting 28 September 2020, businesses must base their needs by job decline and turnover from the beginning of September on.

It should be noted that your business may be ineligible for JobKeeper if you do not meet certain requirements. Businesses must have existed in Australia on 1 March 2020 — the beginning of the program and about a month after COVID-19 first struck Australia. There are a few exceptions to this rule, including for non-profits that primarily work in the country and deductible gift recipients that have been designated as a public fund. In addition to being incorporated before 1 March, businesses can not be in liquidation or have entered into bankruptcy to be eligible for the scheme.

Financial distress safety net

Businesses of all sizes are finding themselves in dire straits during this pandemic. If your business was profitable before the pandemic but is now running into significant debt to stay afloat, it may be eligible for safety net protection. This comes in the form of long and short-term changes to the nation's insolvency laws. On 7 September 2020, the Australian Government announced extension of the short-term changes until at least the end of December. Several more permanent changes specifically for small businesses were announced 24 September 2020, and are set to begin on New Year's Day 2021.

If your business is worried about staying open until the end of the COVID-19 crisis, you can contact the Australian Taxation Office about temporary reduction or deferral of payments.

Investment and Credit Support

The Coronavirus SME Guarantee Scheme is designed as a line of credit for Australian businesses who have been negatively impacted by the coronavirus pandemic, with the majority of funds intended for smaller or medium sized businesses. The program was extended and enhanced beginning on 1 October 2020, and will run until 30 June 2021.

Under the new phase of the Guarantee Scheme, businesses can be eligible for a loan of up to $1 million, an increase from the maximum of $250,000 per borrower in the original plan. In addition, loans can be used for a wider variety of purposes than in the first round, including investment. Businesses will also be able to choose between three- and five-year loans, with a possible six-month repayment grace period.

SME Guarantee loans are available through your business's bank or other lending institution. As a result, all loans are subject to the lender's credit assessment, and the decision to extend a loan is ultimately up to them. The Australian government is working with the banks to make the program flow smoothly and has stated that they hope banks "take into account the uncertainty of the current economic conditions" when approving or rejecting loans. In addition to supporting small and medium sized businesses, the government is supporting lending institutions with temporary changes to its bank capital ratio rules. This will give banks and their customers more options on extending credit.

The current overall stimulus program was first announced at the beginning of April 2020, as the severity and possible length of the COVID-19 outbreak in Australia was first becoming clear. The stimulus was originally designed to cover the wages of about 6 million Australians, according to Reuters. At the time it was hailed as the "biggest economic lifeline that this country has ever seen," by Australian Treasurer Josh Frydenberg.

Need help managing your assets to keep your business running. The team at WMC Accounting is there for you. Contact us today and together we'll make it through this pandemic.