Please note: This is not an attempt to scare anyone, more to alude to opportunities to protect your business moving forward in times of financial market flux.

Your banking arrangements have been fantastic over the last 7 years, You’ve made all your payments on time. The Bank has given you most of what you have wanted when you generally wanted it.
When things are good there is little to be worried about from yours or the banks perspective. But for the last 12 months things are not so good!

The Banks and other lending institutions haven’t been able to get money/capital the way they use to. If they are, the cost of obtaining it is going up.
What does this mean going forward?
Well … we all know that:
Interest rates, Fuel and Food have all moved up.  The RBA is suggesting that there is a need for 100,000 jobs to be lost over the coming period. With the reduction in confidence and the slowing of the economy, small business is going to come under some great pressures if it hasn’t already. Debtors starting to stretch – Creditors starting to push.

This being the case, banks are likely to take a position that they ‘need to conserve our reserves’. They are doing what is important for their business and that is reasonable! But the implications for your business may be profound. If not today it will be in 6 to 12 months time.

Consider this:   All your savings, house, super and perhaps one or two other things that you have forgotten, along with Credit Cards, home loan, Business loan, Business account are all with the one Institution. You have met all your payments since Adam was a boy. But the bank changes their approach or assessment of your business. Because the Banks need to conserve their reserves! 

What happens then, the relationship you thought you had along with the good payment history doesn’t count for much. Your effectively left financially hamstrung

What would happen if they used your savings to cover some of the house debt or credit card, because the mortgage I signed has an ‘All Monies’ Clause which allows surplus funds to be utilised to cover other debts. (Usually if you are in default). Or the credit card is behind but everything else is up to date, you could be considered in default on all your borrowings. Guess what happens then?! You’re in a little trouble with not that many options to fix the problem. If you think taking to another bank, you need to think again. They are under the same pressures.

When you are most likely to need some flexibility or assistance from your ‘banking relationship’ there is a strong possiblity your that your bank is not going to be prepared to help you.

Is this the time to consider finance and banking options for you & your business?

Is it time to be protecting your financial flexibility before it’s too late?
Talk with Finance Know how obligation free to determine some options. There are various opportunities that you may not have considered.

By Patricia Karvelas

June 11, 2008 12:00am

SMALL business owners could be given the option of being taxed as individuals instead of as companies to cut compliance costs and red tape under a proposal the Rudd Government is considering.

Small Business Minister Craig Emerson said the Government would consider new measures designed to spare small businesses the tax paperwork burdens faced by big companies, The Australian reported.

The Institute of Chartered Accountants and Deloitte have proposed that small businesses go through the same tax process as individuals, and have their tax rate based on how much they earn.

“The Government has decided to refer the flow-through proposal to the review of Australia’s Future Tax System headed by Treasury secretary Ken Henry,” Dr Emerson said.

“The flow-through regime is proposed as an option for small companies and unit trusts with five or fewer shareholders wanting to reduce their compliance costs associated with understanding and accounting for different types of financial flows from the entity to its owners.

“I know the institute believes this regime will reduce the tax compliance burden associated with incorporation and unit trusts while maintaining the non-tax benefits of company and trust structures.”

The Government has also decided to refer the BAS Easy option for simplifying GST book-keeping for small business to the Board of Taxation chaired by Dick Warburton as part of the board’s review of the legal framework for the GST.

Dr Emerson said compliance with GST requirements remained the greatest administrative burden for small business.

“This is yet another example of the Government getting out of the way and restoring incentive by pulling away unnecessary red tape that is choking small businesses,” he said.

“Responsible tax reform proposals must maintain the integrity of the system and meet theprinciples of economic efficiency”.

Council of Small Business of Australia chairman Bob Stanton last night warned that the Government must listen to small business or face its wrath, as the Howard government did.

“The now Opposition have seen first hand what can happen to a sitting government when they ignore the might of small business,” he said in a speech at the opening dinner of The National Small Business Summit.

“Fran Bailey, the immediate past minister for small business, must be wondering how many small business owners in her electorate did not vote for her. And why didn’t they vote for the sitting minister for small business? Because the government failed to listen to them.

Because the government failed to recognise they were individuals wanting the respect they so richly deserve.”

Ms Bailey went from having a 6.5 per cent margin in McEwen before last November’s election to retaining it by just 12 votes after a recount.

Mr Stanton called on Kevin Rudd to set a new level of government support for small business and include the Small Business Minister in cabinet.

“He can then have his Government undertake a substantive study into laws from other countries that protect the rights of their small business communities,” he said. “He can have a decent discussion on the future of small business.”

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