Coronavirus stimulus: When will small businesses actually see some cash?

There’s been a lot of talk about the COVID-19 stimulus packages at both a federal and state level, and promises of billions flowing from government coffers into small business.

We know big numbers are not always all they appear to be, and statements from Scott Morrison don’t save a business. Only dollars in the bank that can do that.

So, when exactly will entrepreneurs get their hands on some of the cash being made available?

Some measures are available now, in theory. Many are promised to come into effect in April, and others will open for applications in April, but we have no clear timeline beyond that.

Other measures currently read like pie-in-the-sky promises, with little detail and no schedule in sight.

This article relates to the federal government’s stimulus package. You can find a guide to what’s available state-by-state here, including timings where we know them.

For now, for business country-wide, here’s what we know.

What’s available now?

For the most part, stimulus measures that have kicked in immediately are those that encourage spending.

The extended instant asset write-off scheme, for example, is available from now until June 30, 2020.

Similarly, the accelerated depreciation deductions package is valid for the next 15 months.

Of course, these provide tax benefits on purchases, so are reliant on your business having cash to spend in the first place.

What’s imminent (apparently)?

Pause on loan repayments:

Last week, the Australian Banking Association announced banks would be pausing loan repayments for small businesses affected by the coronavirus crisis.

Business owners have to apply for a deferral and, while we haven’t had any real clarification on what constitutes an ‘affected’ business, there are fast-track approvals processes in place to put this into action as soon as possible.

Every bank is different, but they should all be rolling out this support package for their small business customers as of this week.

Speaking to SmartCompany last week, COSBOA chief Peter Strong urged small businesses seeking to pause their repayments to be patient.

“There’s nothing worse than hanging on a helpline for hours … but this sort of help means [banks] are going to get a lot of calls,” he said.

“Read a book while you’re waiting. Do a bit of work. Cook a pie,” he advised.

Access to credit:

The Reserve Bank of Australia and the federal government have pumped a combined $105 billion into banks and non-bank lenders, with incentives to loan that money out to small businesses.

The RBA said legal and operational details of the scheme will be published before April 16, 2020. And authorised deposit-taking institutions will be able to start using the scheme “no later than” that date.

However, the benefits for banks and non-bank lenders apply immediately, so it’s possible lenders will already be offering lower rates to small business borrowers.

In fact, according to the Australian Financial Review, Commonwealth Bank and NAB both cut rates almost immediately.

If this is a measure you’re considering making use of, it’s worth reaching out to your bank — or exploring other lending options — now.

We don’t know exactly when the money will be in your pocket, but it could be sooner rather than later.

What’s in the calendar?

April is looking like a busy, and expensive, month for the government, as this is when the majority of cash will find its way to both businesses and individuals.

$100,000 grants:

The small business grants of up to $100,000 (which are actually more like rebates) are based on businesses’ business activity statements (BAS). Businesses are entitled to reclaim 100% of Pay-As-You-Go withholding on employee wages, with a minimum rebate of $20,000 and a maximum of $100,000.

This is split over two payments of between $10,000 and $50,000 each.

The first wave of payments will follow the submission of your next BAS, and are expected to start being issued from April 28.

The second wave is expected to start being paid out from June 21.

Income support

The government has expanded access to income support payments to include sole traders and self-employed people, as well as contract workers and casual employees.

They will now be eligible for a coronavirus supplement of $550 per fortnight, which will kick in from April 27.

Recipients of social security, veteran support and income support, and various other concession card holders, will also receive a one-off cash payment of $750 each, paid from March 31.

A second payment will also be made to these recipients, starting from July 13. However, the second payment will not be available to those eligible for the $550 coronavirus supplement.

What’s guesstimated?

There’s a lot of talk of things happening in ‘early-April’, and while that very vague point in time is creeping ever closer, we’re yet to have clarity on just how early in April some of these measures will come into effect.

Loan guarantee scheme:

The government has said its guarantee for 50% of new loans written by banks and non-bank lenders will commence in early-April and will apply to all loans made until September 30.

For lenders, there is also an exemption from responsible lending obligations, although it’s unclear when this comes into effect, or if it already has.

Apprentices and trainees:

Businesses that hire apprentices and trainees will be able to apply for a wage subsidy of 50% of their wages, for nine months, up to a maximum of $21,000.

You guessed it, applications are expected to open in early-April.

The subsidy will apply to wages paid from January 1, 2020, so it will be backdated. But, it’s unclear when exactly the subsidy will be paid.

Access to superannuation:

Individuals, including sole traders, will be able to access up to $10,000 of their superannuation this financial year, and another $10,000 next financial year, all tax free.

Applications for this are expected to open in mid-April, but again, it’s unclear when exactly funds will be released.

What’s still a mystery?

$1 billion for affected regions:

The federal government has set aside $1 billion to support businesses in regions that have been the worst affected by the coronavirus crisis, but there’s not much more detail than that.

According to a government statement, assistance will be available “as soon as practicable”.

Funding will be available during the outbreak, and in the recovery period. However, it is unclear which businesses will be eligible for funding, or how they can apply for it.

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