SMEs need to carefully assess how changes to the trading environment may affect cash flow and business operations, says non-bank business lender ScotPac.
The advice follows this week’s Federal Budget, which outlined a range of measures that could affect SMEs and business owners, as many businesses continue to manage cash flow pressures.
ScotPac CEO Jon Sutton said businesses should engage with financial advisers and funding partners ahead of the reforms, particularly measures related to tax and cash flow management.
“This includes reviewing funding structures to ensure SMEs have the flexibility to respond to legislative changes and manage market disruption,” Sutton said.
He said early planning would be important ahead of the Government’s Payday Super reforms from July 1, which will require businesses to pay superannuation obligations in real time rather than quarterly.
Data from ScotPac’s SME Growth Index showed that 68 per cent of businesses had not prepared their cash flow for the transition.
SMEs also need to consider the impact of other Budget measures. These include a proposal to replace the 50 per cent capital gains tax discount with an inflation-indexation model from July 1, 2027, and the introduction of a 30 per cent baseline tax on discretionary trusts from July 1, 2028.
Businesses moving from trust structures to other structures will receive rollover relief for three years. A two-year loss carry-back policy will also become permanent for companies with turnover of up to $1 billion from July 1 this year.
Sutton said the Budget also included measures affecting SMEs, such as making the instant asset write-off scheme for investments of up to $20,000 permanent, as well as initiatives related to fuel supply. However, some businesses had expected an increase in the threshold to better align with investment purchases.
He also said businesses should work with brokers and financial advisers to assess opportunities arising from the policy changes.
