Five (5) Steps to get you “over the bridge” and survive the Recession

Just understand this is going to be tough, and when it gets tough you either dive, survive or thrive. It is our mission to ensure you thrive once the crisis is past and hopefully grow bigger and stronger on the other side.

You need to be proactive now! Hard decisions aren’t easy to make, that is why they are HARD. If you don’t make the decisions now, there will be others that make them for you, either your landlord, bank, tax office or a supplier) Get on top of those decisions first.

As they say “Be the first to the table!”

Step 1 – Approach your landlord

Yes you have signed your lease to pay an amount of rent per week, per month etc and you are liable for it. But if you are a business that has either been closed down by the Government or your income has fallen drastically, your landlord should understand. If you don’t pay, what can they do? They cant replace you with a like tenant as they can’t open due to closures. You will find that your landlord should/will work with you as they have cashflow problems as well.

Your landlord may have a repayment deferral with the bank, hence they can pass some of that on to you for the term of that deferral. It is in their BEST interest to have a tenant than not have one at all and try to replace you.

Step 2 – Your Bank is in the mood to assist

As with your landlord, it is in the banks BEST interest to provide assistance for both business loans and your private house mortgages. You need to initiate the contact as they generally won’t come to you. Most of the major banks have announced a 6 month deferral on loan repayments and various other cost saving measures eg merchant terminal fees.

Not only are there these announcements by the banks, there are also financial hardship provisions which are available to use. YOU JUST NEED TO CONTACT YOUR BANK before its too late

Step 3 – Government Assistance is coming

By now you would have received a few emails and blogs from our firm regarding  Federal Government stimulus packages 1 and 2, as well as the various state governments and councils are Australia have announced their own packages to assist in these bizarre times.

The largest stimulus announced to date is the 100% PAYGW refund back to your ATO tax account. Most businesses with a turnover of less than $50Mil and you had to be registered for PAYG as at 12^th March 2020, and pay wages during either March Qtr or month of March for monthly lodgers, generally will have access toa minimum of $20,000 to a max of $100,000 to be paid over 6 months

These payments are tied to your BAS lodgements so so important to keep them up to date

At this stage however, we have not received any legislation, but from the details and examples issued by treasury the amount will be applied to your ATO account. If there is a credit, this will be refunded within 14 days

There are other measures including government guarantee to banks for small business loans up to $250k unsecured with repayment holidays for 6 months. At this stage unless your business is strong and basically untouched, we would advise any further borrowings should be considered carefully.

In addition to all this the ATO has established the following support;

• Deferral of ATO Payments (these are for debts after 23^rd January 2020)
• Remitting interest & penalties
• Low interest payment plan (for debts incurred prior to 23^rd January 2020)

Again the ATO won’t come to you automatically so if need be get in touch with them on 1800 806 218 and see what assistance you can get to help with your cash flow. From the experience to date it only takes a few minutes and they are granting payment deferrals for up to 13^th July initially

Step 4 – Keep staff informed

Your staff are and will be your biggest asset, both now and once we are through this downturn. Speak to them. Keep them informed. They are just as anxious as you are in these uncertain times. Be open and honest, be compassionate – everyone is feeling the pain.

Try to reduce their hours as opposed to letting them go altogether as the above assistance is in place (maybe a little slow in coming), but they are coming to assist with retaining your staff.

Step 5 – Speak to us

We have spoken to a large number of clients and still have to, but we are working tirelessly to work through and advise on how best to approach in a methodical manner. We will be in contact. We understand the stresses that as business owners or employees or contractors you are going through hence this 5 step process we have put together is for your assistance.

Please feel free to share to any person you may think may benefit 😊

If you need any assistance, please get in contact with us at

 stephen@smbaccounting.com.au

 P 1300 854 159