COVID-19 Client Update 4
We refer to our previous advice in respect of
- Cash boost
- JobKeeper support
- $250k loans
- Landlord negotiation
We have identified your business as one where there will be significant financial and statutory assistance were available as a result of the Government initiatives.
|1. Cash boost|
Eligible businesses held an ABN on 12 March 2020 and continue to be active, has an aggregated annual turnover under $50 million (based on prior year turnover), and made eligible payments including salary and wages, director fees, retirement or termination payments, compensation payments and voluntary withholding from payments to contractors.
Tax-free cashflow boosts between $20,000 and $100,000 to eligible businesses, delivered through credits in the Activity Statement. The amount is 100% of the PAYG instalments made by the employer with a maximum of $50,000 to 30 June 2020 and a further $50,000 for the September quarter, with a minimum of $20,000 per quarter and will continue until 30 September 2020 at this stage.
|2. JobKeeper support|
Eligible employers will be reimbursed a fixed amount of $1,500 per fortnight for each eligible employee.
Employers will need to pay eligible employees a minimum of $1,500 (before tax) per fortnight to claim the JobKeeper payment. The first payments to eligible employers will commence in the first week of May 2020 for the period starting from 30 March 2020. If employers do not continue to pay their employees for each pay period, they will cease to qualify for the JobKeeper payment.
Eligible businesses with less than $1 billion turnovers require to prove they suffer as least 30% fall in the turnover.The turnover test:-
- GST turnover for March 2020 with GST turnover for March 2019, or
- Projected GST turnover for April 2020 with GST turnover for April 2019, or
- Projected GST turnover for the quarter starting April 2020 with GST turnover for the quarter starting April 2019.
|3. SME loans – up to $250,000|
Such loans are available through your own bank and are assessed on a case by case basis. The application needs to have all of the normal documents as well as a statement on need and hardship.
Below is the list of documents may be required by lenders.
- Copy of bank 3-month current loan statement.
- One-month statements for current unsecured facilities (car loan, credit cards…)
- Two years personal and company tax returns for company directors with notice of assessments
- Latest superannuation statements
- Statements for any share/investment portfolio
We suggest you make the application at least and then respond to any offer from the bank. You may decline it if you do not require it without any bank cost.
|4. Landlord negotiation|
The same turnover hardship assessment done for JobKeeper support applies to the rent reduction. By way of example, if the turnover hardship assessment is calculated at 40%, the landlord will be obligated to provide a minimum of 50% of that amount as permanent rent reduction and the balance of 50% rental deferral to be recouped over at least 24 months.
You should refer to our previous correspondence for further information, also do not hesitate to contact Dominic Pham (email@example.com) or myself (firstname.lastname@example.org) with any queries.
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