Document ID: chunk:federal_register_of_legislation:F2021C00016:body:0:p8
Version: federal_register_of_legislation:F2021C00016
Segment Type: other
Provision Reference: 
Character Range: 19333–22351

funded concessional loans; or
       (b) $2 million in total.
       Note:  '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; and
       'Commonwealth funded concessional loans' includes the Commonwealth loans identified in the program guidelines.
The Corporation has discretion to set the terms and conditions upon which a farm business concessional loan is made, provided that the farm business concessional loan:
       (a) falls within the definition of a 'farm business loan' in the Act;
       (b) has an initial loan term of ten years;
       (c)  has an initial interest‑only period of five years; and
       (d) allows full or partial early repayment (of principal and/or interest) at any time without penalty.
Loan security and capacity to repay
    The Corporation must not approve a farm business concessional loan application unless:
       (a) the farm business is assessed as having the capacity to repay the loan; and
       (b) sufficient security for the loan is provided by the farm business.
    The Board has discretion to determine what security it requires for each farm business loan.
The Corporation must develop guidelines regarding the type of security that it will consider for a farm business concessional loan. The Corporation must consider at least the following types of security:
       (a) registered mortgage over land;
       (b) registered livestock mortgage; and
       (c) registered security interest in water rights.

Mandatory requirements

   Eligibility

A farm business will only be eligible for a farm business concessional loan if the loan falls within the definition of 'farm business loan' in the Act. Generally, eligible farm businesses will either:

       (a) solely or mainly supply, or intend to solely or mainly supply, products interstate or outside Australia; or
       (b) be located in an 'affected area' as defined in the Desertification Convention and have a drought management plan which outlines the activities the loan will be spent on.
In addition, eligible farm businesses are those:

       (a) who are in financial need of a concessional loan;
       (b) where at least one member of the farm business is an Australian citizen or a permanent resident as defined in the program guidelines;
       (c) that are assessed as financially viable, or as having sound prospects of a return to financial viability within the term of the concessional loan;
       (d) that have existing commercial debt and the support of their commercial lender to the proposed concessional loan;
       (e) that undertake all primary production aspects of the business wholly within Australia;
       (f) where at least one member:
              i. has experience operating a farm business; and
              ii. has the farm business as their principal business pursuit (in terms of being where they contribute the majority of their labour and