Leading figures in SME lending spoke about the critical role commercial brokers can play in keeping their clients safe as the Australian Tax Office (ATO) begins to collect tax debts.
ATO must resume reporting SMEs to credit bureaus if they fall behind on their taxes, a practice they had stopped due to continuing tensions in the small business sector caused by the pandemic.
Under current law, the ATO can refer a company to rating agencies if they have outstanding debt greater than $ 100,000 for more than 90 days. SMEs can avoid this by negotiating a payment plan with the tax authorities, and business brokers are encouraged to help their clients through this process before their tax arrears get out of hand.
“OnDeck is a recognized leader in transparent and responsible online lending to small businesses,” said OnDeck CEO Cameron Poolman, who has launched products such as Thinning Loans, which can approve SME finance in two hours. or less, to help businesses get ahead of their debt.
âWe have earned our reputation by pioneering data analytics and digital technology to make real-time lending decisions and deliver unsecured small business loans quickly. “
âAt the same time, if you owe a big tax bill and are worried about paying it off, like any creditor, take the initiative and call the ATO to set up a payment plan.â
âSmall businesses that owe business reporting amounts may be able to pay off these debts interest-free over 12 months, and lenders such as OnDeck will be happy to see that a small business has a payment plan in place because it indicates that your house is in order. “
ScotPac is one of the largest SME lenders in Australia, and one of their senior executives, Craig Michie, said brokers need to make sure lines of communication exist to help their clients avoid tax.
âThe worst thing a business can do is stop communicating with its creditors because it makes creditors more anxious,â he said.
âEven if you can’t pay now but have a working pipeline that will provide cash flow, share those details with creditors and relate your payment to that future cash flow. “
âSMEs should be doing this all the time, but it’s especially important in today’s business environment. “
Read more: How commercial brokers can bring their clients to the end of the lockdown