The extension to the instant asset write-off scheme is to assist COVID-19 recovery by increasing cash flow, supporting business and create more jobs. As part of the Federal Government’s Coronavirus Stimulus Package, the Instant Asset Write-Off Scheme’s success was extended in the 2021-22 Federal Budget to June 2022. There is now no cap on the purchase price of any new depreciating asset.
The extension of instant asset write-off scheme is available to any business with a turnover of less than $5 billion. It also now includes 2nd hand depreciable assets for businesses with a turnover of under $50 million. For more details refer to the ATO website.
How does this extension to instant asset write-off scheme work?
Business can immediately write-off the full value of the asset purchased. There is no limit to the number of assets nor the value. The government’s aim is to assist businesses to acquire the assets they need to progress and grow by reducing their tax with an immediate write-off. This at the same time is stimulating spending and providing a win, win situation for the Australian economy.
Golden Opportunity with no cash needed!
Many businesses do not have the cash for purchasing vehicles or equipment upfront. Attractive equipment finance lending options has been the answer to many businesses to take advantage of the instant asset write-off scheme. Presently, equipment finance offers loans with no cash outlay, historically low interest rates and tax deductions. The asset is usually the security for the loan.
The large array of different asset finance lending products available, is often overwhelming and confusing. The expertise of a specialist business finance broker will explain and clarify these complexities . Their expertise will save you time and money by identifying the right finance for your needs and they will do all the associated documentation and negotiations.
The following is a brief guide from our head broker, Will Haylock regarding our 6 core lending criteria. Based on the current lending market we have put together 6 core lending criteria for the equipment finance industry in Australia. The better these criteria in the eyes of your future lender the better your interest rate could be!
Useful lending tips for the extension of the instant asset write-off scheme
- Time in Business – How long have you been in business and is the business registered for GST?
- Property Owner – Although it is not essential for obtaining approval, owning property will lower the lenders perception of risk and contribute to a lower interest rate.
- New or Used? – Dealer or Private?
- Credit Rating – What is your credit score and are there any adverse findings on your credit report.
- Loan Amount & Term – How much do you want to borrow and over how long?
- Ability to Repay – The better your ability to service the loan the lower the risks.
The combination of extension to instant asset write-off scheme along with attractive business finance, & tax deductions, allows businesses to have reliable and efficient equipment and vehicles. They now can grow and expand their business with no cash outlay. The types of assets you can claim are numerous. The following are some examples of the assets you can write-off:
- Vehicles – Utes, Vans, Cars, Trucks & Buses
- Heavy Machinery
- Marine – Boats
- Factory & Farm Machinery
- Medical Dental & Pharmaceutical Equipment
Making the process Quick & Easy
Will Haylock, Director of Will Finance, says their service specialises in lending services to take advantage of the Government’s extension of the instant asset write-off scheme. As equipment & vehicle finance brokers, Will Finance arranges lending between an applicant and lender. Will says, “We do the hard yakka for businesses, to seamlessly guide them to the next level with new reliable equipment and vehicles.”
What an amazing opportunity for small businesses to update or purchase equipment to help their business grow. The never seen before low interest rates, with no cash outlay or property required for security and tax incentives, allows any viable business to purchase what they need to improve profitability.