Hey business owners, hope you’re doing well and hanging in there; I know business is tough at the moment. Finally some good news! From Monday 19 July 2021, the Covid-19 Business Grant application will be open for qualifying businesses. All other business grants are also now open to apply. Here’s what you need to know.
You may be eligible for a one-off Covid-19 Business grant of $7,500, $10,500 or $15,000 if you meet the criteria I’ve outlined below. A further grant, a wages subsidy called JobSaver, will commences on 18 July 2021; this is an ongoing grant for qualifying businesses (until the lockdown is lifted). There’s also the Micro Business Grant for businesses earning less than $75,000 per year.
As the NSW Government are providing this financial support, business owners will need to apply for these grants using a MyServiceNSW account. Unlike the Cash Boost and JobKeeper stimulus that was prepared by tax professionals, the onus in this case is on the business owner. That being said, you do require a letter from an accountant, tax professional or registered BAS agent to apply for the grant.The letter should outline your decline in turnover as per the eligibility requirements.
For detailed information about the Covid-19 Business Grant, review the grant information here. If you want to read a summarised version, read on.
- You need to be a business, sole trader or not-for-profit organisation in NSW and impacted by the recent COVID-19 restrictions;
- You must have:
- have an active Australian Business Number (ABN)
- demonstrate your business was operating in NSW as at 1 June 2021
- have had total annual Australian wages of $10 million or less as at 1 July 2020
- have had an aggregated annual turnover between $75,000 and $50 million (inclusive) for the year ended 30 June 2020 for the Business Grant and the Job Saver grants.
- have business costs for which there is no other government support available
- maintain your employee headcount as at 13 July 2021 for the JobSaver grant. You can stand staff down so that they can receive the federal disaster payment but to get this grant you must maintain your headcount, you cannot sack or retrench staff.
If you earn under the $75K threshold, you are considered a micro business and may be eligible for the Micro Business Grant. The Micro Business Grant is for eligible businesses who have had an aggregated annual turnover between $30K and $74,999. Payments of $1,500 per fortnight will be available and applications open from late July 2021.
UPDATED ELIGIBILITY PERIODS
Eligibility periods have now been updated. Review the information below and talk to your accountant or BAS agent about the best way for your business to apply.
For the Business Grant, the Micro Business Grant and the JobSaver Grant, you business needs to have experienced a decline in turnover of 30% or more due to the Public Health Order over a minimum 2-week period from 26 June 2021 to 17 July 2021 compared to:
- the same period in 2019, or
- the same period in 2020, or
- the 2-week period immediately before the Greater Sydney lockdown commenced (11 June to 25 June 2021)
Businesses and not-for-profit organisations on the NSW border with Victoria impacted by the Victorian Stay at Home Directions that began on 27 May 2021 may use a different comparison period to demonstrate a decline in turnover. For each of the 3 grant amounts, these businesses must demonstrate the relevant decline in turnover over a minimum 2-week period from 27 May 2021 to 17 July 2021 compared to:
- the same period in 2019 or
- the same period in 2020, or
- the 2-week period immediately before the Victorian Stay at Home Directions commenced (12 May to 26 May 2021)
GRANT AMOUNTS AND CRITERIA
Covid-19 Business Grant – Three different grant amounts will be available depending on the decline in turnover experienced over a minimum 2-week period from 26 June 2021 to 17 July 2021, compared to the same period in 2019: Why 2019? It’s assumed in 2019 your trading was “normal” and not impacted by Covid or any other external factor.
- $7,500 for a decline of 30% or more
- $10,500 for a decline of 50% or more
- $15,000 for a decline of 70% or more.
Micro Business Grant – Payments of $1,500 per fortnight will be available and applications are now open.
JobSaver Grant – if your business fits the eligibility criteria, you can apply for the Business Grant and the JobSaver grant. The payment will be equivalent to 40% of the weekly payroll for work performed in NSW:
- minimum payment will be $1,500 per week
- maximum payment will be $100,000 per week.
Weekly payroll should be determined by referring to the calculations underlying the most recent Business Activity Statement (BAS) provided to the Australian Taxation Office (ATO) prior to 26 June 2021 for the 2020-21 financial year. View the guidelines for more information about calculating your weekly payroll.
If you’re a non-employing business, such as a sole trader, you may be eligible to receive a payment of $1,000 per week.
WHAT YOU’LL NEED TO APPLY
- a MyServiceNSW Account
- your proof of identity
- your valid ABN/ACN number
- your business banking details for payment
- Australian income tax return or Notice of Assessment
- qualified accountant, registered tax agent or registered BAS agent details.
WHAT ELSE YOU NEED TO KNOW
Eligible businesses (including non-employing businesses such as non-employing sole traders) and not-for-profit organisations can apply for a one-off grant of $7,500 (tier one) or $10,500 (tier two) or $15,000 (tier 3) via one application:
- $7,500 (tier one): Businesses that have experienced a decline in turnover of 30% or more due to the Public Health Orders will be eligible for a grant of $7,500.
- $10,500 (tier two): Businesses that have experienced a decline in turnover of 50% or more due to the Public Health Orders will be eligible for a grant of $10,500.
- $15,000 (tier three): Businesses that have experienced a decline in turnover of 70% or more due to the Public Health Orders will be eligible for a grant of $15,000. If you receive this grant, you will receive an initial payment of $10,500 with a further payment subject to authorisation by Service NSW.
Eligible businesses may only receive one grant tier.
Only one grant is available for a single ABN.
Multiple businesses under a single ABN are only eligible for one grant.
Successful applicants may be subject to an audit. You will need to keep all documentary evidence relied upon in your application for a minimum of 5 years.
HOW FUNDING CAN BE USED
The Business Grant will help eligible businesses and not-for-profit organisations with business costs incurred from 1 June 2021 to 18 July 2021 (when JobSaver commences). These costs may include, but are not limited to, the following expenses:
- utilities, wages and rent;
- financial, legal or other advice to support business continuity planning;
- marketing and communications activities to develop the business;
- the cost of perishable goods that can no longer be used; or
- other activities to support the operation of the business.
The Grant must only be used for expenses for which no other government support is available. For example, the Grant cannot be used to pay government fees and charges that would be covered by the $1500 small business fees and charges rebate.
Eligible businesses can use JobSaver to cover business costs incurred from 18 July 2021. These costs may include:
- salaries and wages
- utilities and rent
- financial, legal or other advice
- marketing and communications
- perishable goods
- other business costs.
While the business support packages should go part of the way to helping the businesses in the community stay afloat, the reality is that money has been slow to materialise and there has been ongoing confusion over eligibility periods. A number of businesses not operating in 2019 will welcome the changes this week updating those criteria.
Keep in mind that when you apply for a business grant, you cannot apply for the Federal Government Covid Disaster payment, so, choose wisely. If your business is eligible for a grant and you can wait for funding to arrive, it might be a better option for you and your business. Of course, weigh up your decision with your accountant or BAS agent if you’re unsure.
Also look for other ways to help keep your business afloat.
- While tempting, DON’T ask for rent referrals and mortgage referrals, DO ask for payment waivers, reductions or mortgage holidays. Ask your bank for fee or interest reductions or waivers.
- Take a fine tooth comb through your business expenses – where can you cut, reduce, defer, cancel?
- Start brainstorming alternative product and services offerings – where can you pivot, yep I went there, in your business?
I will update this article as more information becomes available. Alternately, you can get notified by Service NSW when more information is available using this link.
Need to future proof your business – read my tips here.