The Coronavirus (Covid-19) pandemic is a challenging time for everyone in Australia (and the world). There are particular challenges for small business including reduced demand or if the business has had to close indefinitely. This may be on top of the impact of the recent bushfires.

This is a guide on steps to take and where to find support.


Is your business still viable?

Can your business recover?

You may need to work out whether your business is still viable. You can do this by:

Covid-19 – Small Business Financial Survival Guide

Step 1 Small business survival and viability

If possible, make a plan on how your small business will survive and remain viable. Do speak to your accountant and get support as needed.

You can also use the Australian Taxation Office’s Business viability assessment tool.

The Government has now provided temporary relief for company directors from the duty to prevent insolvent trading. A safe harbour is available for six months commencing on 25 March 2020 and expiring on 25 September 2020. If you believe your company may be trading while insolvent, get both financial and legal advice, on whether the safe harbour applies and steps that can be taken to manage the risks associated with that decision.

Step 2     Government assistance

The Government has already announced measures to assist small business following the impact of the Covid-19 pandemic. This assistance is in addition to the support provided to small businesses affected by the bushfires. You may need to access both sets of assistance.

The detail of the current support for businesses is available from It is likely that further assistance will be announced. In summary, what has been offered to date includes:

  • Boosting cash flow for small businesses that employ people. This includes grants of up to $100,000.
  • SME guarantee scheme to support the flow of credit. The Government will provide a guarantee of 50% for unsecured loans to be used for working capital. The loan can be up to $250,000 with a term of up to three years with an initial six-month repayment holiday.
  • Temporary relief (six months ending on 25 September 2020) for financially distressed businesses. This includes measures to:
    • Increase the threshold to issue a statutory demand to $20,000. A statutory demand is a demand for payment under the Corporations Law. If it remains unpaid the company may be presumed to be insolvent.
    • Increase the time to respond to a statutory demand from 21 days to six months.
    • Increase the threshold to commence personal bankruptcy proceedings to $20,000.
    • Relief for directors from any personal liability for trading while insolvent (see above).
  • Increasing the instant asset write-off threshold to $150,000. This could help free up cash.
  • Introducing a 15-month investment incentive that accelerates depreciation deductions.
  • Supporting the retention of apprentices and trainees by introducing a 50% wage subsidy for nine months.
  • A JobKeeper payment of $1500 per fortnight for eligible employees on the books of the business as at 1 March 2020.
  • A JobKeeper Payment of $1500 per fortnight for eligible employees on the books of the business as at 1 March 2020. The eligibility requirements to apply for JobKeeper are that on 1 March 2020 you carried on a business in Australia or were a not for profit organisation that pursued your objectives principally in Australia and:
    • You employed at least eligible employee
    • your eligible employees are currently employed by your business for the fortnights you claim (including those who are stood down or re-hired)
    • Your business has faced a 30% fall in turnover or 15% fall in turnover (for ACNC registered charities other than universities and schools)
    • Your business is not ineligible
    • For full details and how to apply see JobKeeper Payment

Step 3     Commercial leases

The National Cabinet (Statement dated 29 March 2020) has agreed to implement a moratorium on evictions for commercial tenancies for the next six months. The principles that underpin the agreement are:

  • Tenants and landlords are encouraged to agree on rent relief or temporary amendments to the lease
  • Commercial property owners should ensure that any benefits received in respect of their properties should also benefit their tenants in proportion to the economic impact caused by coronavirus
  • Landlords and tenants not significantly financially affected by the pandemic are expect to honour their lease
  • Further mechanisms for assistance are still being considered

On 7 April 2020, the National Cabinet announced a legally enforceable Code of Conduct (that will be legislated in each State and Territory). The Code only applies to tenants that are a small to medium sized business with an annual turnover of up to $50 Million and are eligible for JobKeeper Payment. See relief for commercial tenants for further details.

The Code will cover fourteen principles which include:

  • Landlords must not terminate leases for non-payment of rent during the COVID-19 pandemic
  • Tenants must stay committed to their lease terms
  • Landlords must offer reductions in rent (as waivers or deferrals) based on the tenant’s reduction in trade during COVID-19
  • Benefits that owners get for their properties (for example reductions in land tax) should be passed on to the tenant (in proportion).

This means that if you are having trouble paying your lease the first step is to contact the landlord to negotiate:

  • Rental reductions or a rent-free period
  • Termination of the lease if it is likely the business cannot recover

If this is unsuccessful consider accessing the rights under the mandatory Code of Conduct (when legislated).

Step 4     Creditors and making repayment arrangements

Do contact your creditors’ hardship departments if you are going to struggle to make repayments. A range of information is available on this website setting out the steps to make a repayment arrangement.

Do check if your lender is offering assistance. Banks are offering small business loan customers with facilities up to $10 million a deferral on loan repayments for six months. If considering a deferral of repayments, be aware of the interest charges and make repayments (even if now and then) when you can to avoid your debt increasing.

Do tell your creditor that you have been affected by the pandemic and explain how.

Do keep making repayments you can afford.

Do try to negotiate reductions in interest and fees if you can.

Do ask for deferrals in tax payments, if necessary.

Beware of borrowing to make payments and/or deferring payments that your small business cannot realistically pay back later.

Step 5 Speak to one of our financial counsellors

If your problem still hasn’t been solved, or you’re feeling overwhelmed, call us on 1800 413 828 to speak with one of our financial counsellors.

Warning: This is for information only. Do not rely on it as legal advice. It is recommended that you seek specific advice on your own situation.