Tag Archives: Minister Bruce Billson

funding4business – Employee share scheme changes 1st July 2015

Changes to Aussie employee share schemes for start-up companies came into effect from 1st July 2015

Employee share schemes (ESS) provide an opportunity for employees to receive shares (or options to buy shares) in the company they work for.

The Australian government has made changes to the tax rules for employee share schemes to make it more attractive to employers and employees to participate, including a new concession for start-up companies.

Changes to employee share schemes include:

when options are taxed

increasing the maximum ownership limit to 10% of the total shares (up from 5%)

increasing the deferral period to 15 years (up from seven years) for tax deferred schemes.

Additional concessions for start-up companies
Under the new rules if shares are acquired in a start-up at a discount of up to 15% (relative to market value), then the discount is exempt from income tax. The shares will only be subject to capital gains tax on disposal.

What is a start-up?
Start-up companies, from any industry, need to:
be incorporated for less than 10 years
be an Australian resident company
have no equity interests listed on an approved stock exchange
have an aggregated turnover less than $50 million.

What you need to know?
The Australian government have published a guide for employers and standard templates for start-up companies to help you develop and maintain an employee share scheme. We have also developed a guide for employees to help them in making decisions to participate.

Find out more at:- www.ato.gov.au
Employee share schemes
ESS: Guide for employers
ESS: Guide for employees

funding4business – Instant tax deduction

Aussie small businesses – Instant tax deduction – asset threshold increase to $20,000 is now law

Small businesses can obtain an immediate tax deduction for assets acquired costing less than $20,000 purchased since 7.30pm 12 May 2015.

You can use the new threshold amounts in claiming deductions in your 2015 income tax return. The deduction is claimed in the income year in which the asset is first used or installed ready for use.

What’s changed?
The instant asset write-off threshold has increased to $20,000 (up from $1,000). This allows you to immediately deduct the business use portion of a depreciating asset that costs less than $20,000.

The changes apply to assets acquired after 7.30pm on 12 May 2015 until 30 June 2017,
on a per asset basis, so several assets each costing less than $20,000 would qualify,
to new and second hand assets.

Assets that cost $20,000 or more (which can’t be immediately deducted) will continue to be deducted over time using a small business pool.

The low pool value threshold will also increase to $20,000. This means that an immediate deduction is available if the pool balance is less than $20,000 at the end of an income year.

What’s not included?
There are a small number of assets that aren’t eligible for accelerated depreciation, for example horticultural plants that have specialised depreciation rules.

Record keeping
Just like any other business asset, you’ll need to keep records to support any claims for a deduction. This includes the ongoing business use of an asset and its eventual disposal. The ATO has a risk-based program to identify taxpayers that are not meeting their obligations and will take measured approaches to influence taxpayer behaviour.

Find out more at:- ato.gov.au
Growing Jobs and Small Business – expanding accelerated depreciation for small businesses

funding4business – technology shocks coming for Aussie banks

funding4business – technology shocks coming for Ausssie banking

The Murray Financial Inquiry of 2014 into Australia’s financial systems has predicted that technology changes and market disruptors using new technologies will have the largest influence on changing the banking system in Australia, as we know it.

At the forefront of this change is the emergence of peer-to-peer crowdfunding in Australia.

Charles Moldow, General Partner, Foundation Capital in the USA, in a recent report titled  “A Trillion Dollar Market by the People, for the People”, claims that “peer-to-peer marketplace lending will over the next few years, remake banking as we know it”.

Today technology and innovation are making possible a new generation of financial services that are more affordable and more available. That’s why Moldow, believes that “marketplace lending” will evolve to be a trillion dollar “market by the people, for the people”.

Foundation Capital predicts that by 2025 $1 trillion in loans will be originated in this manner globally.

The peer-to-peer crowdfunding industry rose to prominence in the USA & UK during the onset of the Global Financial Crisis in 2008, plugging a hole left by the reluctance of cash-strapped banks to lend to small businesses.

Consequently it has created an opportunity for non-traditional lenders through peer-to-peer platforms to cater to the growing demand for alternative business financing options and directly connecting borrowers and investors

For the first time in banking, the online marketplace makes it possible for a third party to match financial supply and demand. As a result, lenders and borrowers can now find one another and agree to loan terms, all without the involvement of retail banks or credit card companies.

The San Francisco based LendingClub Corp, one of the USA’s largest operators in the online peer-to-peer marketplace, has facilitated more than US$5 billion in loans since its launch during the GFC in 2007. This shift to a peer-to-peer crowdfunding is not unique to the USA.

The major UK networks providing these investment options include, Funding Circle, CrowdCube, Zopa and RebuildingSociety. Funding Circle alone has facilitated over GBP400 million in business loans in the UK over the four years since establishment.

See Charles Moldow’s complete Foundation Capital report here:- www.foundationcapital.com/downloads /foundationcap_marketplacelendingwhitepaper.pdf

funding4business – Minister for Small Business Bruce Billson endorses Crowdfunding

Minister for Small Business Bruce Billson endorses peer-to-peer crowdfunding

The Hon. Bruce Billson the Federal Minister of Small Business reinforced the government’s commitment to supporting peer-to-peer crowdfunding at a presentation at the Australian Stock Exchange (ASX) on 30th April 2015, whilst launching an independent report titled:-

“Alternative Finance in Australia – Private investment, disruption, fintechs & crowdfunding”.

The Federal government sees crowdfunding as a way forward into breaking the stranglehold of the major banks in the provision of finance to small businesses, and will introduce new legislation in the Budget Session to make the process easier for lenders and borrowers.

The peer-to-peer crowdfunding industry rose to prominence in the USA & UK during the onset of the Global Financial Crisis in 2008, plugging a hole left by the reluctance of banks to lend to small businesses. Securing finance from the banks in Australia today is no different.

However, the arrival of crowdfunding on-line marketplaces in Australia and New Zealand is providing a viable alternative to small businesses who are seeking business loans. It enables them to explore alternative sources of funding and bypass the banks and middlemen.

With true peer-to-peer crowdfunding there are no banks and no middlemen, and the Internet based marketplaces enables farmers and rural businesses borrowers to connect to lenders and investors directly, by searching and matching on appropriate investing and borrowing criteria.

Once a suitable match is identified, the business borrowers and lenders/investors can optionally exchange contact details, discuss and potentially negotiate the terms and conditions of a possible loan or investment on mutually acceptable terms.

funding4business is one such peer-to-peer marketplace and lists business requiring loans, start-ups requiring seed or equity funding, investors and private lenders seeking secure investments for their available funds.

We are not a bank nor a finance company and we do not lend and or administer loans.

We operate the marketplace and facilitate introductions.

funding4business allows lenders and investors to achieve better returns on their investment funds, while potentially offering lower than bank interest rates for borrowers. Investors choose the risk they want to take and the borrowers with whom they feel comfortable and secure and visa versa.

Listing in funding4business marketplace is simple, quick and free.

funding4business – Release # 8 Business Health Check

NEW! Get your Business Health Check!

Complete our brief online questionnaire and get your Business Health Score.

Your business health score is based on an analysis of the standard business performance ratios that apply to your business such as;  Working Capital Ratio, Profitability Ratio, Inventory Turnover Ratio, Debt Ratio and other parameters.

Your Business Health Score will provide a guide for you and prospective lenders and/or investors as to the health and ongoing viability of your enterprise.

A per-requisite of your business health check, is to have your business loan requirements listed in the funding4business marketplace.

NEW! Get Business Mentoring and Advisory Services!

Need help with your business?    Need advice on cash-flow management?

Then you can hire one of our business advisers for an hour, for a day, or for a month.

They can help you in preparing business plans, cash flow analysis, sales and revenue forecasting, or negotiating a business loan on your behalf.

They can provide independent objective advice and provide an external view on your business and any issues you are facing.

 

funding4business – crowdfunding in Australia a step closer

Crowdfunding in Australia a step closer

This is an extract of an article written by Nassim Khadem, Deputy Editor BusinessDay | Dec 8, 2014, Fairfax Media

 

Entrepreneurs will soon be able to take advantage of crowdfunding.
Crowd-sourced equity funding to help start-ups in Australia looks a step closer.

The Abbott government released on Monday a discussion paper on how Australia could create a regulatory system that protected investors who decided to take a punt on start-ups.

Crowdfunding, which allows a large number of investors to make small equity investments in a company, has taken off globally, growing to more than $5.1 billion last year. But Australia has been slow to join and current regulations impede crowdfunding.

A Treasury discussion paper comes after the final report of the financial system inquiry called on the government to enable crowdfunding.

Many submissions to the inquiry suggested Australia was already lagging other countries in crowdfunding and called for a new regulatory regime to enable it.

“A well-developed crowdfunding system can aid broader innovation and competition in the financial system,” the inquiry report, led by former Commonwealth Bank boss David Murray, said.

New Zealand revived its commercial laws earlier this year to allow retail investors to provide crowdfunding. The Treasury discussion paper suggests Australia could look to this model, although the government said it was not locked into any model.

“We are keen to ensure that any crowd-sourced equity funding model appropriately balances supporting investment, reducing compliance costs – including for small business – and maintaining an appropriate level of investor protection,” a joint statement by

Finance Minister Mathias Cormann and Small Business Minister Bruce Billson said.
The Murray report noted the risks associated with crowdfunding investments would require changes to consumer protection laws, including pointing out the risks of failure and fraud.

Allowing debt and equity to be raised from the “crowd” would provide small businesses with an alternative source of capital that could create jobs and lift productivity, it said.
“One of the obstacles that start-ups face is access to capital,” Mr Billson said.

“Crowdfunding would allow them to get that first-start business off the ground with the resources that it needs.”

Scale Investors chief executive Laura McKenzie, a supporter of product-focused crowdfunding platforms such as Pozible, Kickstarter and Indiegogo, welcomed the discussion paper but said her key concern was about investor education.

“It is critical that any endorsement of equity crowd funding is enhanced with an education program both around the risks involved and portfolio approach required,” she said.

“It is also important in terms of the fees and services provided by the intermediary platforms themselves, who take a passive role compared to the traditional, more hands-on venture capital model. My preference is that in addition to investment caps there are also limitations on the fee structures for intermediaries.”

Tim Heasley, chief operating officer of Artesian Venture Partners, which started VentureCrowd, Australia’s first equity-based crowdfunding platform, said the move would incentivise innovation and competition in the financial system.

Chris Gilbert, the co-founder of Equitise, another crowdfunding start-up targeting small business that will launch in Australia next year, said crowd-sourced equity funding would be an easy win for the government. “It is potentially a very powerful tool for early-stage, higher-risk ventures to raise capital in Australia,” Mr Gilbert said.

The head of KPMG’s digital consulting arm SR7, James Griffin, said one of the first great successes of crowdfunding was the completion of the base to hold the Statue of Liberty in New York. “A new record was set by one crowdfunding platform recently, seeing 62,000 people raise more than $13 million to commercialise a project,” he said. “It is particularly important to us as a country, as the remoteness of Australia does not apply when people consider investing via crowdfunding platforms.”

Airtasker chief Tim Fung said while equity crowdfunding was a complex concept, he was confident it would be a huge driver of economic growth in Australia if implemented correctly. “We just need to get the balance right between free markets and regulation.”

Career One chief Karen Lawson said the growth of equity-based crowdfunding would not only enable businesses to launch and grow quickly but would arguably become a barometer for success.

Milan Direct founder Dean Ramler said the model worked well overseas, especially in the United States. “As it stands it is not easy to provide equity to staff,” he said. “If this can change, it would really help start-ups.

funding4business – government supports CrowdFunding for Start-ups

Federal Government supports CrowdFunding for Start-ups

The Abbott government has recently approved the National Industry Investment & Competitiveness Agenda, which in part supports the use of CrowdFunding and CrowdSourcing to enable start-ups and small businesses to access alternative finance and funding methodologies to source equity funding for their enterprises.

This decision is a follow-on from the earlier recommendations of the now disbanded Corporations and Markets Advisory Committee that had previously recommended that the government should implement enabling legislation to facilitate the use of CrowdFunding, as it would enable start-ups to raise capital and access new forms of funding, which would in turn, boost job creation and the broader economy.

It would also bring Australian legislation in line with CrowdFunding and equity raising legislation that has been successfully introduced in the USA, New Zealand, Canada and the UK, to support start-up enterprises which are driving the economies in these countries.

So what is meant by the term CrowdFundng

CrowdFunding is a method of peer-to-peer financing which can help start-up enterprises and established smaller businesses access fast and simple finance for business loans or start-up equity, by raising funds from the online community and by connecting with a number of independent investors via the Internet in a peer-to-peer relationship.

Start-ups and small businesses are introduced to potential investors directly through an open marketplace based on certain investment matching criteria and algorithms and thereby bypass the complexity and costs of middlemen and the banking world.

How does CrowdFunding differ from Start-up Funding

Start-up funding uses the same method of CrowdFunding but is specifically focussed on the raising or sourcing of seed or establishment capital for early stage equity investment in innovative start-up enterprises, especially in the technology sector. The start-up funds are raised in a similar fashion from the online community of independent investors in a peer-to-peer relationship.

Investors are introduced to potential start-ups through a marketplace based on certain investment matching criteria and algorithms. This type of equity investment is called risk capital because both the risk of loss and the potential for profit may be considerable.

Some background on the emergence of CrowdFunding.

Since the Global Financial Crisis in 2008, the traditional banking system had been hurt by the high underwriting and servicing costs associated with lending to small businesses. Consequently it has created an opportunity for non-traditional lenders through a process called peer-to-peer marketplaces to cater to the growing demand for alternative business financing options by directly connecting borrowers and investors.

Peer-to-peer (P2P) lending lets investors lend directly to individuals or businesses and uses low-cost online platforms to cut out the banks and other financial institutions.

The San Francisco based LendingClub, is one of the USA’s largest players in the online peer-to-peer Crowd funding marketplace, has facilitated more than US$5 billion in loans since its launch in 2007.

This shift to peer-to-peer (P2P) lending is not unique to the USA. In Britain for example, some peer-to-peer (P2P) networks are offering “mini-bonds” by lumping together lots of small, unsecured loans from retail investors such as superannuation funds, and lending them to established businesses in the form of debt funding. The major UK P2P networks providing these investment options include, Funding Circle, Zopa and RebuildingSociety.

Peer-to-peer (P2P) lending acts as a flexible investment alternative where start-ups or established businesses can borrow funds and negotiate directly with willing investors such as self managed super funds, at mutually acceptable investment terms and conditions.

funding4business has recognised this technological and cultural shift and is the first and only peer-to-peer (P2P) marketplace in Australia, specifically established to facilitate Start-up funding and business loans, by connecting Aussie business borrowers together with Aussie investors such as SMSFs, and HNWIs for their mutual benefit.

The funding4business marketplace is open and transparent, offers a broad range of investment options, provides flexibility, offers potentially better investment returns, faster and simple settlement, online registration and algorithmic loan matching to your investment criteria.

funding4business is not a bank, finance company or lender, and we are not owned or backed by a bank or finance company.

We are an Aussie company, with an Aussie team, applying Aussie know-how, to an emerging P2P alternative investment marketplace for Aussie business borrowers and Aussie investors.

funding4business was launched in Australia on 1st August 2014.

 

 

funding4business – $15 million buys permanent residency

$15 million Premium Investor Visa buys permanent residency

The Abbott Government has announced the introduction of new Premium Investor Visa Program (PIV) as an adjunct to the existing Significant Investor Visa Program (SIV) in order to tap into the explosion of new wealth throughout Asia, and to boost economic growth, job creation and encourage more HNWIs to call Australia home.

Under the existing Significant Investor Visa Program:-

This visa can lead to permanent residency in Australia after four years.
The prospective applicant must invest at least A$5,000,000 in complying investments in Australia.

The Federal Government proposes to create a new Premium Investor Visa (PIV) which offers a faster 12 month pathway to permanent residency for those who invest at least $15 million, plus will make changes to the existing SIV program to encourage investment.

Under the proposed Premium Investor Visa Program:-

This visa leads to permanent residency in Australia after twelve months

The prospective applicant must invest at least A$15,000,000 in complying investments in Australia.
The program will be introduced from 1st July 2015, and investments must align with “the Government’s national investment priorities”.

The program and the investment criteria will be managed by Austrade.

This is great news for funding4business, as there will be a larger pool of investment capital available to Aussie businesses through the first and only peer-to-peer (P2P) marketplace in Australia.

funding4business was specifically established to facilitate business loans, by connecting Aussie business borrowers together with Aussie investors such as SMSFs, HNWIs, SIVs and now PIVs holders for their mutual benefit.

Peer-to-peer (P2P) lending acts as a flexible investment alternative where established businesses can borrow funds and negotiate business loans directly with willing investors such as super funds and HNWIs, at mutually acceptable investment rates, terms and conditions.

The funding4business marketplace is open and transparent, offers a broad range of investment options, provides flexibility, offers potentially better investment returns, faster and simple settlement, online registration and algorithmic loan matching to your investment criteria.

We are an Aussie company, with an Aussie team, applying Aussie know-how, to an emerging P2P alternative investment marketplace for Aussie business borrowers and Aussie investors.

funding4business was launched in Australia on 1st August 2014.

 

 

 

 

funding4business – only 10% of total bank loans are to small business

EFIC states only 10% of total bank loans are to small business

In the recent submission by EFIC to the Murray Financial Inquiry, the report provided some very interesting statistics into current status of Australian banking loans.

The report stated that in Australia residential mortgage loans represented 63% of all bank debt while loans to small businesses only represented 10% of bank debt.

This is in stark contrast to the USA where housing loans represent 34% of total bank debt and 40% of total bank debt in Canada.

Business loans in Australia representing 10% of bank debt pales into insignificance when compared to 80% of bank debt in countries like South Korea and Switzerland.

funding4business agrees with the EFIC submission in that, new innovative and successful established businesses in Australia are being deprived of funding from the major banks to expand their job creating enterprises, which in turn has an adverse effect on the growth of the Australian economy.

This is why smaller Australian businesses today are turning toward peer-to-peer (P2P) marketplaces, where lenders and borrowers can now find one another and agree to business loan terms, all without the involvement of retail banks or finance companies.

The P2P lending industry rose to prominence during the onset of the Global Financial Crisis in 2008, plugging a hole left by the reluctance of cash-strapped banks to lend to small businesses. Peer-to-peer (P2P) lending lets investors lend directly to individuals or businesses and uses low-cost online platforms to cut out the banks and other financial institutions.

Peer-to-peer (P2P) lending acts as an affordable and flexible alternative to expensive bank loans, where businesses can borrow funds and negotiate business loans directly with willing lenders at mutually acceptable rates and terms.

funding4business is the first and only peer-to-peer (P2P) open and transparent marketplace in Australia, specifically established for providing business loans, connecting Aussie business borrowers to Aussie lenders for mutual benefit.

The funding4business marketplace is open and transparent, offers potentially lower interest rates, faster settlement, online registration and algorithmic loan matching as the norm. P2P lending is a win/win situation for Aussie borrowers and Aussie lenders.

funding4business as the name suggests, targets the small established business borrowers requiring loans between $25,000 and $100,000 backed by directors or owners guarantee and or loan security.

funding4business launched in Australia on 1st August 2014.

funding4business – Minister Billson endorses crowdfunding

Minister Billson endorses crowdfunding for small businesses

Recently the Federal Minister of Small Business Bruce Billson, has come out and publicly backed the need for legislation to facilitate the broader use of the crowdfunding investment model as a source of equity funding for start-ups and small businesses in Australia.

Minister Billison said, “he wants to make it easier for entrepreneurs to start and grow a business in Australia, and therefore crowd-sourced funding is a new opportunity that we should embrace”

These sentiments were echoed by the Federal Minister for Communications Malcolm Turnbull who claimed that “there is an urgent need for small businesses in Australia to access affordable capital to grow their businesses”.

Minister Billson’s call for the broader use of the crowdfunding model in Australia is supported by a trend globally toward crowdfunding and peer-to-peer lending.

Smaller businesses globally today are turning toward crowdfunding and peer-to-peer (P2P) marketplaces, where lenders and borrowers can now find one another and agree to business loan terms, all without the involvement of retail banks or finance companies.

The peer-to-peer lending rose to prominence during the onset of the Global Financial Crisis in 2008, plugging a hole left by the reluctance of cash-strapped banks to lend to small businesses. Peer-to-peer (P2P) lending lets investors lend directly to individuals or businesses and uses low-cost online platforms to cut out the banks and other financial institutions. The evidence is in – crowdfunding is here.

LendingClub’s based in San Francisco has facilitated more than US$5 billion in loans since its launch during the GFC in 2007, and revenue has more than doubled to US$87.3 million in the six months ended June 30, 2014 from a year earlier.

This shift to a peer-to-peer (P2P) lending strategy is not unique to the USA. In Britain for example, some peer-to-peer (P2P) networks are offering “mini-bonds” by lumping together lots of small, unsecured loans from retail investors such as superannuation funds, and lending them to established businesses in the form of debt funding.

The major UK P2P networks providing these investment options and small business loans include, Funding Circle, Zopa and RebuildingSociety. Funding Circle alone has facilitated over GBP366 million in business loans in the UK over the four years since establishment

Peer-to-peer (P2P) lending acts as an affordable and flexible alternative to expensive bank loans, where businesses can borrow funds and negotiate business loans directly with willing lenders at mutually acceptable rates and terms. Consequently, peer-to-peer loan matching is emerging as a viable and reliable source for business loans in Australia.

funding4business has recognised this shift and is the first and only peer-to-peer (P2P) marketplace in Australia, specifically established for providing business loans, and connecting Aussie business borrowers to Aussie lenders for mutual benefit.

The funding4business marketplace is open and transparent, offers potentially lower interest rates, faster settlement, online registration and algorithmic loan matching as the norm. P2P lending is a win/win situation for Aussie borrowers and Aussie lenders.

funding4business was launched in Australia on 1st August 2014.