Faster than expected Economic Growth

The Mid-Year Economic and Fiscal Outlook has delivered some promising news for businesses. The Australian economy is showing signs of a faster than expected recovery.

The size of an economy is typically measured by the total production of goods and services in the economy which is called gross domestic product (GDP). In this economic update the Federal Government revised the expected GDP for 2021. Real GDP is now expected to grow by 4.5% in 2021 instead of the originally anticipated 4.25%. Real GDP captures only the volume of what was produced and in particular the increases in the volume produced only, which takes away the effect of prices changing.  Although there are also things that raise GDP that don’t necessarily make a country better off, since GDP is the main measure of economic growth an increase in GDP usually comes as a positive sign of a growing economy. 

This follows on from the real GDP rebounding by 3.3% in the September 2020 quarter. Australia’s GDP growth was largely driven by a strong recovery in household consumption. With consumer confidence on the rise, more Aussies are now getting out and spending. Stronger demand can help support revenue growth for Australian businesses. This comes as a confidence boost for businesses looking at their future recovery.  To further help your business stay on track in its recovery, you may also want to consider financing. A business loan can assist your business in acquiring the assets and equipment it needs. It can also support cash flow and help your business grow with the economy.

The Government is also providing additional support to assist businesses in obtaining finance. Under the Small and Medium Enterprise (SME) Guarantee Scheme, the Government is providing a 50% guarantee on business loans. This can make it easier for businesses to access the finance they need.  This scheme is available for all businesses with an annual turnover of $50 million or less. Eligible businesses can access up to $1 million in credit from participating lenders. The maximum loan term is 5 years.

Loans under this scheme can be used for a wide range of business purposes. This can include financing equipment or vehicles, supporting cash flow, or working capital. This can provide your business with the flexibility and support to grow. 

The SME Guarantee Scheme is available until 30th June 2021.

Speak to a Suitable Loans Business & Commercial Finance Broker today.

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