Proactive tax efficiency and asset protection advice for successful business owners. 

Protect your personal assets from professional and business risk and ensure your tax structuring reduces your annual tax liabilities as much as possible.

Our Blog

Our Latest Blog Entry

2 November 2021

Paying off your "Instant Asset Write Off"‚Äč purchase - show me the after tax profit to pay it off.

The saviour of many businesses during these Covid times might become their undoing without prudent cashflow management and profit planning.

To keep the economy going over the Covid era the federal government made available the ability to claim an upfront tax deduction for the full cost of a business asset up to $150,000 in purchase price. Usually this type of purchase could only be claimed over a number of years as depreciation over the useful life. Often these assets are funded by Equipment Loans / Leases using someone else's money and therefore have debt and interest payment requirements.

Whilst this certainly helped both the buyers and the sellers to achieve their goals at the time there is then the requirement for a business to make after tax profit going forward to be able to pay of the loan used to buy the asset. So it is crucial that your business allocates the required cashflow requirements and has the profit after tax to fund it.

For Example $150,000 Loan and 7% per annum over 7 years:

Repayment Calculator Results:

$2,263.90 per month repayment.

$190,167.60 total monthly payments over 7 years

$190,167.60 total of all payments

7 Year Payment Breakdown:

$150,000 amount financed (this has to be paid out of after tax business profit).

$40,167.60 total interest (this is paid out of gross business revenue).

Business Loans

Our Latest Blog Entry

20 October 2021

In business and you want to borrow money to fund business expansion or new business assets?

What are the key issues that bring many applicants unstuck?

  1. Not being able to show that the business has after tax net profit to fund the loan repayments.  That is, you have a zero or negative figure at the bottom of your profit and loss statement.  This type of profit needs to be consistent for at least two years.
  2. The business owes money to the ATO for Income tax or BAS.
  3. The business owes superannuation to the staff super funds.
  4. The business has paid out untaxed "drawings", therefore there will be a tax issue for the current tax year.
  5. Extra "expenses" are pumped through the business to reduce tax.

We work with our clients to ensure they "dress up well" for the potential lenders.