3 questions SME owners should ask themselves before JobKeeper 2.0

Aug 13, 2020

JobKeeper is due for a big shake-up next month, which means if you’ve been relying on it to get your business through these rocky times, you need to start planning ahead now.

With the small business ombudsman and many economists concerned about an “insolvency tsunami” hitting small businesses, it’s critical that you start thinking about your ongoing funding plans now to avoid being swept up in the tide.

JobKeeper support is set to end for many businesses on September 27, while it will continue for other eligible businesses under a reduced amount until March 28.

So with that in mind, you may want to start assessing your business’s ability to make loan repayments, pay staff without JobKeeper support, take care of ATO debts, as well as any other financial obligations.

So, what are the big 3 questions?

Businesses that have been drawing on JobKeeper should start asking the below three questions, says Wayne Smith, Group Executive of SME lender Scottish Pacific.

1. What support will I lose, and has my business got the cash available to replace it?

2. What payments will I have to make from October or March that I’m not making now?

3. Do I have any pressing creditors ready and able to take action against me once they are able to?

Why these questions are so important

The unfortunate fact is that over the coming months many businesses will have a funding gap and have to face some very tough decisions.

“Your answers to (the above) questions will guide whether you seek extra funding or make a tough call on your business,” Mr Smith says.

“You don’t want the business to accumulate debt if it’s not going to be viable.”

Mr Smith says businesses can consider seeking rent reductions, JobKeeper, government grants, and ATO deferments.

“These initiatives have helped many businesses hibernate or trade through the tough times. However it’s important to consider how this will pan out when commercial evictions for non-payment of rent return, and creditors are able to present winding up petitions,” Mr Smith adds.

Financing options you may consider

It’s important to note that the federal government’s Coronavirus SME Guarantee Scheme is being extended, with the initiative allowing lenders to provide eligible SMEs unsecured loans “more cheaply and more freely”.

Mr Smith says another option business owners could consider is Invoice Finance, which makes use of assets already in the business rather than using the family home for security.

“Put simply, using Invoice Finance brings forward payment of your invoices so you have cash in hand. You get 80% paid earlier, and the remainder later,” Mr Smith says.

Now may also be a good time to consider whether your business could benefit from a self-liquidating revolving line of credit facility, says Mr Smith, rather than further exposing yourself by taking on more loan repayments.

Get in touch

As mentioned earlier, if you think you might have a funding gap in your business, it’s good to act in advance – not when you’re scrambling to make ends meet.

So if you’d like to explore some funding options for your business please get in touch today – we’re here to help your business however we can.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.


Testimonials

Testimonials

Reviews from clients

Elbre & Lynette N.

Ormeau Hills, QLD
Cindy is amazing. She went above and beyond and then went further than that. We have come a long way with her over the past 7 or so years, and she has become like a member of our family. She always ensured that we got the best interest rates and value for money. She stepped in to save a transaction at settlement to ensure we did not lose the house we purchased by spending hours on the phone to ensure everything went through without a hitch. We cannot fault this amazing lady and hope to continue our working and personal relationship with her😊

Scott B.

Bogangar, NSW
Cindy is dead set the best. Awesome, down to earth, super efficient and knows her stuff. Highly recommend her services as she achieved what we thought was impossible in such a short period of time and with zero fuss. Thanks again n2n Finance, best experience ever!!

Rachel C.

Greensborough VIC.
I can not thank Cindy enough for her help over the last 2-3 months. Myself and my partner have been able to purchase our dream first family home because of her. Not only is she upmost professional but she also makes you feel so comfortable when you need to contact her with any questions( and I had a lot). The dedication that she puts in to her work and relationships with clients is nothing but admirable. Thanks so much again Cindy, we look forward to working with you again in the future.

Erin M.

Reservior VIC.
Cindy was an absolutely pleasure to deal with. This was my first home loan and I was pretty naive to how it all works. Cindy put up with my late night emails and calls answering all my questions and never once made me feel like an annoyance. I felt supported throughout the whole process and really felt as if Cindy had my back. Cindy came highly recommended to me through my Aunty and she did not disappoint. I’ve now recommended her to friends who have also had nothing but a seamless experience with her. 10/10. Thanks Cindy! You’re an absolute legend.

Peter B. and Sandra B.

Narre Warren VIC.
Cindy is hands down the best in the business!
She assisted us with our first ever investment properties and she explained absolutely everything we needed to know. If there was anything we didn’t fully understand she would go over and over again until we did. Cindy is very knowledgeable and professional and by the end of your dealings she will feel like a friend to you. Cindy has also assisted my son with finance in purchasing a home and we have absolute confidence in recommending Cindy to any family or friends we know.

Matthew G. and Bel G.

Ashmore, QLD
This was our first dealing with a mortgage broker and n2n Finance made the whole process of the refinancing of our loan so easy. Cindy was amazing in answering our questions and made us feel we were in good hands with our decision. Thanks Cindy!

Karen L. and Ray L.

Gold Coast, QLD
Fantastic service, Cindy provided us with plenty of options. Our loan with her was 2 years ago but we will be using her for our next property purchase. Totally recommend dealing with Cindy.

Ty C. and Connie C.

Kilmore, VIC
We were referred to Cindy by a member of the family, and it was the best thing that we have been advised to do. Would like to thank you for all the advice, support, encouragement and simpleness in making the change so easy. Thank you Cindy.

Toula & Maria - FRIGG Cafes

Absolute legend in finance, Cindy is more than a leading source, she takes the time to comfortably get to know you and your financial circumstances and needs then looks for a solution.  She sources what is the best option. Even if you are having trouble raising finance from the big 4 banks, Cindy is well networked in the Industry and has many gateway options to assist. We highly, highly, highly recommend Cindy and N2N, great service with results.

Phil J. and Jo J.

Banora Point, NSW
Cindy was an extremely professional, knowledgeable and accommodating when it came to refinancing our home loan. She listened and took the time to understand our personal situation and worked hard to make the change quickly and efficiently and got us a great rate too. I would recommend Cindy to anyone looking to give their bank the flick and save some money. Thanks Cindy.
Read more...