2020 has been a difficult year for all Australians. To keep the economy flowing, the federal government announced a range of stimulus packages. As the expiration dates on these packages draw closer, businesses will need to move quickly if they want to take advantage.

If you are eyeing up a new earthmover, excavator or farm machinery, here are some government incentives that you may be eligible for, and their expiration dates.

The instant asset write-off

Until the 31 December 2020, eligible businesses can claim an immediate deduction for the business portion of the cost of the asset in the year that the asset is first used or installed ready for use.

Under the instant asset write-off, businesses can claim up to $150,000 as a tax deduction when purchasing equipment such as bulldozers, earthmovers, or excavators. The package can be used for both new and second-hand assets, as well as across multiple assets.

The instant asset write-off eligibility criteria and threshold have changed over time.

Businesses will need to check their eligibility and apply the appropriate threshold amount.

Click here to see further information.

Coronavirus SME Guarantee Scheme

The coronavirus Small and Medium Enterprises (SME) Guarantee Scheme is geared towards providing SME’s access to business finance.

Participating lenders are offering guaranteed loans for a five-year term of up to $1 million. Interest rates will vary depending on individual circumstances but will be capped at 10 per cent.

The scheme has been extended to enable continued support for SME’s facing the ongoing impact of COVID-19. Part two of the scheme will be available for loans made by participating lenders until 30 June 2021.

Click here to see further information

Is this the best time to buy?

According to Bill Tsouvalas, Savvy Managing Director and business expert, the month of December may be the best time to buy heavy plant and machinery for a long time.

“We’re in perfect conditions for business purchases – a high asset write-off threshold, extremely low interest rates, and guaranteed loans. If you are hesitant about pulling the trigger on a new purchase, don’t. This is as good as it’ll ever get,” states Tsouvalas.

“You can claim the GST paid on your purchase, interest paid, and claim depreciation. You can also borrow more than the value of the item, so you won’t have to put any money down and pay off rego, insurance, and other costs over time. You can also put in balloon payments and vary your repayment terms, if you are a seasonal business. It’s a very flexible product. Coupled with the SME Guarantee, you could save a lot. It’s best to consult a broker instead of trying to find a participating lender – it will save you a lot of time and headaches.”

Remember to consult a financial advisor before making any major financial decisions.

Source: Trade Earthmovers | Are you running out of time to take up Government Incentives

15 December 2020