Document ID: chunk:federal_register_of_legislation:F2019C00466:reg:9:p1
Version: federal_register_of_legislation:F2019C00466
Segment Type: reg
Provision Reference: reg 9 (pt 1/2)
Character Range: 7893–10750

9  Grant of Agribusiness Natural Disaster Loans—farm business experiencing hardship

Eligibility requirements—hardship
 (1) Subject to subsection (2), the Corporation may grant a loan to a farm business where the Corporation is satisfied that:
 (a) the business is an eligible farm business; and
 (b) the business was directly affected by, and is experiencing hardship as a result of, the North and Far North Queensland Monsoon Trough (25 January to 14 February 2019); and
 (c) the loan will assist the business to do one or more of the following:
 (i) replace its lost stock or crops;
 (ii) replant crops;
 (iii) restore or replace on-farm infrastructure lost or damaged as a result of the Monsoon Trough;
 (iv) meet operating expenses relating to damage arising out of the Monsoon Trough;
 (v) refinance its existing debt; and
 (d) the business has existing commercial debt and the support of its commercial lender to the proposed loan.
Example: The operating expenses referred to in subparagraph (c)(iv) include expenses such as the costs of transporting livestock or produce during and directly after the floods, the costs associated with obtaining other finance (such as an overdraft or line of credit) to enable the farm business to continue operating, and the costs of obtaining any alternative accommodation required as a result of the floods.

When a loan must not be granted—hardship
 (2) The Corporation must not grant a loan under subsection (1) if granting the loan would result in the farm business:
 (a) having more than 50% of its total debt in Commonwealth-funded concessional loans; or
 (b) refinancing more than 50% of its existing commercial debt.
Note: The business's total debt is the sum total of debt established on commercial terms, at commercial interest rates, plus all Commonwealth funded concessional loans provided to the farm business. 'Commonwealth funded concessional loans' includes the Commonwealth loans identified in the program guidelines published under section 14.
Example 1: A farm business has $1 million in existing commercial debt, but does not hold any other debt in Commonwealth-funded concessional loans. If the business sought only to acquire new debt under this program, it could not obtain more than $1 million. If it obtained more than that amount, it would hold more than 50% of its total debt in Commonwealth-funded concessional loans.
Example 2: A farm business has $1 million in existing commercial debt, and seeks only to refinance part of that debt. The business could refinance up to $500,000 of that existing commercial debt under this program. This would leave the business with $500,000 in commercial debt and $500,000 in Commonwealth-funded concessional loans. If the business refinanced a greater amount, it would hold more than half of its total debt in Commonwealth-funded concessional loans.