Strategies and advice for businesses to stay in control through COVID-19 and get ahead of the pack

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COVID-19 Business Continuity – 23rd April

I’m here with the COVID-19 business continuity update on Thursday 23rd April.

In today’s update:
1. Applying for rent relief for commercial tenancy
2. Bridging finance to support cash flow

1. Applying for rent relief for commercial tenancy

Today, the Victorian parliament is due to pass the mandatory code of conduct for SME Commercial Leasing Principles during COVID-19.

The mandatory code was announced by PM Scott Morrison on 7th April and I wrote about it in my email of that day. As a refresher:

  • The code allows for rent relief for businesses that are experiencing financial stress due to COVID-19 pandemic.
  • Businesses that are eligible for the JobKeeper scheme are automatically considered to be in financial stress and as such are entitled to mandated rent relief.
  • The purpose of the rent relief is to assist with cash flow so it will be part waiver, part deferral.
  • The amount of rent relief you are entitled to is proportionate to how much your revenue has decreased.
  • At least half of the rent relief will be a waiver (you won’t have to pay, ever) and the remaining half will be deferred. The deferred portion can be amortised over the remaining term of your lease or 24 months, whichever is greater.

Click here for the mandatory code of conduct for SME Commercial Leasing Principles during COVID-19

To assist you with the first stage of the process, your Tenfold Business Coaching mentor has a template you can use.

If your business doesn’t meet the JobKeeper eligibility criteria but you are experiencing financial stress, you can still try to negotiate a reduction but your landlord may not be required to provide one. Your Tenfold coach can help you prepare to negotiate.

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2. Bridging finance to support cash flow.

Several of our clients who were hit by the stage 2 restrictions have expressed concern about cash flowing the JobKeeper payments until the anticipated payment date in mid May. The government are obviously mindful of this and today Treasurer Josh Frydenberg announced that the major 4 banks have agreed to expedite applications for bridging finance for businesses that are struggling to pay salaries before they receive JobKeeper payments. A dedicated hotline will be created to help businesses that are eligible for JobKeeper get faster access to finance.

Mr Frydenberg said, “Our message today is if you’re a business that is eligible for the JobKeeper payment, as required, you need to pay your staff ahead of receiving the money from the Tax Office. Go to your bank, ring their hotline, ask for that support, and that support will be forthcoming.”

At the time I’m writing this email, these are the best contact points for the banks:
ANZ: https://www.anz.com.au/business/covid-19/
CBA: https://www.commbank.com.au/business/eform/market-rate-loan-enquiry.html?ei=CTA-ApplyLoan
NAB: https://www.nab.com.au/common/forms/coronavirus-contact-form
Westpac: https://www.westpac.com.au/help/disaster-relief/coronavirus/business/

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If you have any questions about JobKeeper eligibility for April between now and next Thursday, don’t hesitate to discuss it with your business coach. We’re continually updating your financial models and revenue forecasts so we can assist you to understand if and when you might be eligible.

Ash

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