Leading non-bank business lender ScotPac says the Federal Budget delivered a mixed bag for SMEs who continue to face a challenging operating environment, with the conflict in the Middle East continuing to impact their cash flow and revenue targets.

ScotPac CEO Jon Sutton said SMEs would welcome some budget measures, including fuel supply initiatives and also the decision to make permanent the instant asset write-off scheme up to $20,000.

However, many businesses would have hoped for an increase in the threshold to better align with investment purchases.

“While this decision will provide further certainty for SMEs, the true cost of investing in productive assets for many SMEs is considerably higher than the $20,000 limit.

“For example, our own asset finance loan book shows that the average loan for SMEs purchasing productive assets is around $100,000.”

Mr Sutton said SMEs would need to carefully assess the impact of other major budget measures on their business including:

  • replacement of the capital gains tax 50% discount with an inflation-indexation model from 1 July 2027.
  • a new 30% baseline tax on discretionary trusts to come into effect from 1 July 2028. SMEs transitioning out of trusts and into other business structures to receive rollover relief for three years.
  • a permanent two‑year loss carry back for companies with turnover of up to $1 billion from 1 July 2026.
  • free access to mandatory standards covering areas such as construction, health and safety, and product safety.

Mr Sutton encouraged SME owners to engage with their broker or advisor to ensure they were maximising opportunities available to them under the measures outlined in the budget.

He said the changes to capital gains tax and discretionary trusts in particular, also highlighted the need for SMEs to have timely and proactive discussions with their key advisors to ensure they can assess and plan for potential impacts on their business.

“This includes reviewing funding structures to ensure SMEs have the flexibility to respond to legislative changes and manage market disruption.

“For example, the Federal Government’s new Payday Super reforms reforms to come into effect from 1 July will require businesses to fund superannuation obligations in real time rather than deferring payments across a quarter.

According to the latest ScotPac SME Growth Index 68% of SMEs reported they have made no cash flow preparations for this transition.

“At ScotPac, we’re ready to support SMEs with fast, flexible funding solutions that help them manage cash flow, unlock working capital and stay on the front foot to deal with these changes,” he said.

______________________________________________________________________________

ScotPac is Australia and New Zealand’s largest non-bank SME business lender, providing funding to small, medium and large businesses from start-ups to enterprises exceeding $1 billion in revenues. For over 35 years, ScotPac has helped thousands of business owners succeed, offering fast and flexible funding. From simple to complex, small to large, start-up, growth or turnaround – ScotPac can help with a range of funding including Invoice Finance, Trade Finance, Asset Finance, Line of Credit, Business Loans and Asset Based Finance. ScotPac was recently awarded The Adviser Magazine’s Debtor Finance Loan of the Year for a sixth time. 

For more information contact:

Todd Hayward
Mob: 0412 205 151