FYI: Built up Leave Entitlements (due to Covid) can be a Headache. But there is a solution.

Cashflow loans, either secured or unsecured, can be a great way of easing pressure on balance sheet from amassed leave entitlements due to the pandemic. Read on:

Cashflow loans, either secured or unsecured, can be a great way of easing pressure on balance sheet from amassed leave entitlements due to the pandemic.

Over the last two years people have been banking leave like never before. This is due to a range of factors. People who are working from home and can deal with domestic issues within that context are not forced to take leave days to handle them.

Also, lockdowns, border closures and travel restrictions have made the idea of taking a dream holiday overseas almost impossible. This, in turn, has driven the costs of local holidays through the roof and most people don't love the idea of taking leave just to stay home.

The confluence of all these issues has resulted in a mass of backed up leave entitlements which look very ugly on balance sheets. In some cases, there may be payout situations that have a significant impact on cashflow which can have a negative flow on effect to general business operations.

Under these circumstances, businesses do have the option of borrowing money to tide them over and keep their cash flow strong. Often known as cashflow lending, lenders will assess a company's operating position and if there's stable income, we often be happy to provide a loan even without the need for property security.

Recently, the federal government implemented a loan guarantee scheme whereby any business that has been adversely affected by the pandemic (or flooding in NSW) can have 80% of their loan guaranteed by the government. This enabled lenders to provide loans with a greater deal of confidence and flexibility. While initially that scheme was set to expire at the end of December 2021, the government has now extended it for another 6 months (albeit under slightly amended terms).

That means that businesses with turnover of less than $250M can take out loans (either secured or unsecured) of up to $5M for a term of up to 10 years.

If you think this could be of use to you or your business, don't hesitate to contact us to have a confidential discussion.

If you are keen to learn more get in touch with the team at CapStack.

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