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Game Changer

15 Oct 2020 2:38 PM -
A key focus in the Federal Government's budget, handed down on 6 October 2020, included support to Australian businesses and to promote investment. The strategy includes a larger incentive scheme, enabling eligible businesses to 'write off' or expense the full cost of eligible depreciating business assets, such as motor vehicles, machinery and equipment.

The enhanced scheme is also known as temporary full expensing. This has created an even greater opportunity for our valued referral partners in conjunction with NLG Leasing, to assist your self-employed clients with their asset or equipment finance needs.


Who Qualifies?

We need to consider a couple of key factors to determine eligibility:
1) Is the business asset being purchased new or used?

2) What is the annual aggregated turnover for the business entity, purchasing the motor vehicle or equipment?


New Business Assets

  • All Australian businesses with aggregated annual turnover up to $5 billion can expense the full cost of new business assets and equipment.
  • The business asset must be first used or installed ready for use by 30 June 2022. The expense claim will apply in the financial year that the business asset is first used or installed ready for use.
  • There is no limit or cap on the cost price.
  • There is also no limit regarding the number of new business assets that can be purchased by an eligible business.
  • The full cost of any improvements to the new business assets, or existing assets owned by the business can also be expensed during the above period.


Used Business Assets

Australian businesses with aggregated annual turnover of less than $50 million:
  • Can claim a full deduction for the cost of any second-hand business assets they purchase and first use or install ready for use until 30 June 2022.
    • There is no limit or cap on the cost price.
    • There is also no limit regarding the number of second-hand assets that a business can purchase.
Aus businesses with aggregated annual turnover between $50-500 million:
  • Can claim a full deduction for the cost of any second-hand business assets they purchase until 31 December 2020, but must be first used or installed ready for use by 30 June 2021 provided:
    • The cost price is less than $150,000 (ex GST).
    • There is no limit regarding the number of second-hand assets that a business can purchase.
Temporary full expensing is certainly a 'game changer', encouraging Australian businesses to purchase additional motor vehicles and equipment for the foreseeable future. We encourage you to be proactive by offering to arrange any finance your self-employed clients may need (including pre-approvals and limit facilities) if they plan to take advantage of this incentive scheme.

Connecting with your clients
Have you contacted your clients recently to simply 'check in' or to offer additional assistance during these challenging times? Are you not sure how to approach your clients regarding their current financial circumstances?

At NLG Leasing, we remain committed to providing our referral partners with the necessary resources to keep you connected with your valued clients.

We have prepared two new email templates that you are welcome to download, customise and send to both your individual and business customers. It is a great way to keep in touch as well as generate potential new opportunities for your business. To access the templates from our Broker Resource Library, simply click HERE.


Happy to help.

If you are looking for a solution to assist your consumer and commercial clients with all asset, equipment and cash flow finance solutions - but don’t yet have the knowledge and can’t justify the high costs associated with multiple accreditations, specialist systems or a full time specialist on the payroll – then NLG Leasing is the right business partner for you. If you would like more assistance, please contact the NLG Leasing team on 1300 722 011 or email support@nlgleasing.com.au