For brokers with small business customers, now is the time to tell them the deadline for the $30,000 instant asset write-off is fast approaching.
SME lender OnDeck Australia is urging SMEs to act fast before 30 June 2019 to take advantage of the write off in the current financial year.
As part of the 2019/20 Federal Budget, the instant asset write-off was increased to $30,000 and expanded to include enterprises with a turnover of less than $50m, up from the previous $10m.
Figures from the Federal Government confirms that while over 350,000 businesses have already taken advantage of the instant asset write-off, 3.4 million SMEs more are set to benefit from the new rules.
However, OnDeck’s independent research confirms that although 84% of small business owners know about the instant asset write-off, two out of five of them were worried that the write-off would have ended with a change in government.
“A more certain political environment together with the enlargement and expansion of the instant asset write-off, means SMEs can now invest in their business with certainty, while benefiting from tax savings to aid cash flow,” OnDeck Australia CEO Cameron Poolman said in a statement.
Time is of the essence
According to Poolman, acquiring finance to purchase eligible assets “can be an uncertain and time-consuming process” for businesses that depend on bank funding. OnDeck found one in four SME owners have been turned down for bank finance in the past, and 29% of those that have successfully acquired funding said their business was negatively impacted by the time taken to get finance.
OnDeck also found that most SME owners would use the instant asset write-off to invest in IT equipment and a new vehicle.
“With 30 June just around the corner, time really is of the essence. I urge SMEs to act fast to take advantage of the write-down. It’s not just about tax savings. It’s an opportunity to strengthen your business through increased productivity and efficiency,” Poolman said.