How to access the $30k Instant Asset Write-Off on a shoestring
Just because the $30,000 Instant Asset Write-Off is available, doesn’t mean eligible small business owners have the available cash to make the most of it ahead of EOFY. But there is a workaround.
The Instant Asset Write-Off has been a temporary source of relief for eligible small business owners for several years now, and it shows no sign of disappearing just yet.
Under the scheme, eligible businesses with annual turnover of up to $50 million can write off the depreciation of eligible equipment purchases up to $30,000.
As an incentive, the Instant Asset Write-Off is effective encouragement for small business owners to invest in new kit like IT hardware, vehicles, tools and office furniture.
Temporary relief measure could be here to stay
While the Instant Asset Write-Off has always been pitched as a temporary incentive, it’s continued to remain in play since it was first introduced in 2011. But it’s changed significantly over that period.
In its earliest iterations, the incentive was only available for purchases totalling less than $1,000. But then in 2016 we saw a significant increase as it jumped to $20,000. And it was at this stage that the Instant Asset Write-Off became big news for Australia’s SMEs.
And the 2019 Federal Budget in April promised to increase the threshold to $30,000 if passed into law.
There’s just one problem: not all startups and SMEs have enough cash in the bank to enable purchases of this size and they’re missing out on valuable tax savings as a result.
But there is an alternative.
Fintechs offering unsecured business loans to the rescue
New options for borrowing money are offering a way to turn this situation on its head, so that business owners can receive the cash injection they need in a very short turnaround time.
Are you one of the 15 percent?
2017 research by MYOB and OnDeck found that, of the loans being issued by OnDeck, around 15 percent of borrowers were using the service to purchase new equipment.
This growing trend demonstrates the strength of this new option for small business finance, and it appears to be supported by the Government as well.
In 2018, the Morrison Government introduced a $2 billion Australian Business Securitisation Fund, which essentially provides an alternative source of funding for eligible fintech lenders.
Is this the way of the future for small business finance? If you’re in need of new equipment but currently strapped for cash, at least it may be the future of finance for your small business.
Have you considered MYOB Loans Powered by OnDeck*? MYOB customers can apply for a loan between $10,000 and $250,000 with payment terms ranging from 6 to 24 months. Apply for a loan today with no repayments until July 1 2019**
* Disclosure: Loans are issued by OnDeck Capital Australia Pty Ltd ABN 28 603 753 215. MYOB holds a 30 percent stake in OnDeck and has a referral agreement under which it earns a commission on loans referred to OnDeck. “OnDeck” refers to On Deck Capital Australia Pty Limited ABN 28 603 753 215. OnDeck® is a Registered Trademark. All Rights reserved. Loans subject to lender approval.
** This offer to defer commencement of loan payments is only available to MYOB customers taking their first OnDeck unsecured Term Loan with the loan agreement commencing between 29 April 2019 and 30 June 2019. Term loan applications are subject to strict eligibility criteria. For full business loan terms and conditions see ondeck.com.au. This offer does not apply to existing OnDeck customers, or to OnDeck’s Secured Equipment Finance product. Terms of the offer are: loan repayments begin the week commencing Monday 1st July 2019; and if you choose to accept the offer, the total loan term will be extended by the period of time equal to your loan payment deferral. Not valid in conjunction with any other offer.
The information provided is general in nature and should not be taken as tax advice. For specific advice relating to your circumstances, please contact the ATO or your tax advisor.