Publications / Food and Agribusiness
Farm businesses are advised to take action now if they hope to receive assistance under the recently announced Australian Government’s Farm Finance scheme.
Queensland farmers will be the first to benefit from concessional loans of up to $650,000 to help manage debt under the scheme. But with just $60 million allocated to the scheme over the next 2 years the number of applicants may well exceed the scheme’s capacity.
What are the loan details?
The Federal Government is negotiating the specifics of the scheme with each state government so the details may vary from state to state. In Queensland, the scheme will be administered by the rural adjustment authority, QRAA, and is limited to assisting with debt restructuring.
The maximum amount of the loan is $650,000 with a maximum term of 5 years and a starting variable interest rate of 4.5%.
Who can apply?
The concessional loan scheme is for farm businesses that:
- can demonstrate their need, their ability to repay a loan and can provide sufficient security, and
- are experiencing debt servicing difficulties but are considered commercially viable in the longer term.
Each loan applicant will be required to meet eligibility criteria, lending obligations and provide evidence that they can meet loan repayments.
The next step
While applications are not yet open, any farm businesses interested in taking advantage of the scheme should start compiling the information likely to be required for the loan application. This would include any of the usual financial data required by a commercial lender.
An opportunity for permanent solutions
While some may see this scheme as a short term fix, the smart farm business owner will take advantage of the opportunity to identify and implement more permanent solutions.
The breathing space provided by the low interest loan should be used to improve the overall interest cost and security position with your existing bank and underpin an improved financial structure.
McCullough Robertson subsidiary Allegiant FS is able to assist farm businesses with independent financing advice including advising on the preparation of your application for the Farm Finance scheme.
For further information about the scheme visit the Farm Finance page of the Department of Agriculture, Fisheries and Forestry website.
Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.