 |
|
 |
|
|
|
|
|
|
|
|
|
|
 |
EC Interest Subsidy Support - Sml Bus (Revised) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A small business that derives at least 70% of its normal turnover from the provision of goods or services for farming activities in Exceptional Circumstances (EC) areas, or operates in towns that are substantially reliant on farmer income, have less than 10,000 population and are located in an EC area may apply for EC Interest
Subsidy Support.
The declared areas are:
Northern Victoira Revised: Includes the local government areas of Gunnawarra, Moira, Campaspe and Greater Shepparton. Click here for a map of the Northern Region EC declared area.
North East Region: Covers the Shires of Alpine, Indigo, Mansfield, Mitchell, Murrindindi, Strathbogie and Towong and the rural cities of Benalla, Wangaratta and Wodonga. Click here for a map of the North East EC declared area.
Central Victoria North Revised: The local government areas of Loddon, Greater Bendigo, Central Goldfields and Mount Alexander. Click here for a map of the Central Victoria North EC declared area.
Central Victoria South Revised: The local government areas of Hepburn, Macedon Ranges, Whittlesea, Hume, Melton, Wyndham, Greater Geelong and Borough of Queenscliff. Click here for a map of the Central Victoria South EC declared area.
Central and East Gippsland Revised: The local government areas of East Gippsland and Wellington (excluding the Macalister Irrigation District). Click here for map.
To receive assistance small business operators will be required to meet eligibility criteria established by the Minister for Agriculture, Fisheries and Forestry, which are summarised herein.
The scheme is funded by the Australian and Victorian Governments and administered by Rural Finance.
Essentially assistance is for small businesses that would normally be considered viable but which, due to Exceptional Circumstances are experiencing financial
difficulties and are in need of assistance.
Definitions
- Small Business means a commercial enterprise that has less than 100 full time employees or equivalent and holds a registered ABN.
- Employee means a person paid for his/her labour and does not include directors, partners, owners or independent contractors.
- Full time work is not less than 35 hours per week. For part time or casual employees the aggregate of hours worked divided by 35 will determine the equivalent number of full time employees.
- Business Turnover means the value of all goods and services supplied or likely to be supplied by the Small Business from its business activity for a 12 month period (excluding GST, sale of business assets and sales of a personal nature).
- Business Activity means legal activity for profit directly associated with the applicant's viable commercial business (not a hobby) and measured by business turnover.
Purpose of Support
The support will facilitate one or more of the following strategies:
Improvements in business viability
Business continuity
Debt restructuring.
Subsidy Support
A subsidy is available based on the interest payable on, and associated costs of, borrowings supplied by a commercial institution, vendor or by private arrangements. Support will be provided where loans are provided on commercial terms, at arms length and at a competitive interest rate with that which is generally applicable to the type of loans being subsidised. Commercial borrowings or associated costs of borrowings already subsidised under any other Commonwealth scheme will not be considered for support.
Rural Finance may deduct from the commercial borrowings the full cost of capital purchases where the capital purchase was made since 7 November 2006 for small businesses reliant on farming activities or since 25 September 2007 for small businesses operating in towns of less than 10,000 population.
The level of support for the 2010/11 year will be up to 80% of the interest payable on eligible business debt to an amount that creates a breakeven result.
The closing date for applications is 31 March 2011, except for Central and East Gippsland (revised) which closes on 30 April 2011. A 28 day grace period may apply to each closure date.
The provision of support in any year does not guarantee support in a subsequent year. Likewise businesses that did not receive support in a previous year may be eligible in a subsequent year.
Applicants can apply for an additional interest rate subsidy within the same period as their last successful application, provided this is for additional debt in relation to drought carry on. Any additional support will be provided on a pro rata basis and the total amount payable is not to exceed $100,000. Where a business is already in receipt of support an application for a further period of support cannot be lodged earlier than three months after the date of that support.
Rural Finance with the agreement of the Australian Government may attach other terms and conditions to the support considered necessary for any particular case.
Rural Finance may also terminate support under the scheme and where necessary seek recovery of subsidy amounts where subsidy recipients do not rectify any identified breaches to terms and conditions of support.
The total amount of support payable in each EC year for a business may not exceed $100,000 or part thereof if the EC period is less than 12 months.
Where an owner, lessee operates more than one small business or a farm and small business, the operator can receive collectively a maximum of $100,000 on the business(es) and farm related debts.
Eligibility Criteria
In assessing the eligibility of a small business for EC Interest Subsidy Support the following factors will need to be satisfied:
- The small business derives at least 70% of its turnover from the provision of goods and services for
farming activities that are located within EC areas, or operates in towns that are substantially reliant on farmer income, have less than 10,000 population and are located in the EC declared areas.
- The small business is in financial difficulty due to the impact of EC on farm enterprises. In considering
financial difficulty Rural Finance shall take into account:
• the total amount of interest payable per annum
• the estimated business turnover over the medium term
• the owner or lessee’s equity in the business in relation to the amount of current and future
indebtedness, together with the business and other assets and income.
- Without support under these guidelines the small business would not have the capacity to achieve or
maintain sustainable long-term viability.
- The small business has been viable in the past and has the potential to return to viability in the future. In assessing the likelihood of long-term viability of the enterprise the following factors shall be taken into account:
i) the expected future capacity of the business to operate profitably (without Government support) as measured by its ability to meet its future financialcommitments relating to:
• operating costs
• living costs of the operator
• servicing of the business debts
• future capital requirements for plant and improvements
• investment requirements to return business to profitability;
ii) the long-term economic trends which impact on the business enterprise;
iii) the demonstrated technical, financial and business management performance of the owner;
iv) the provision of financial support for the business enterprise by commercial lenders through the EC period and beyond.
- The owner is primarily reliant on the business for his/her livelihood. In this regard it is expected that the owner has operated the business for at least two years and under normal circumstances contributes at least 75% of his/her labour to the business enterprise and derives at least 50% of income from the business.
- The applicant is able to demonstrate a need for financial assistance. In this regard, the personal
resources of the family are relevant.
- The owner has disposed of:
• all non-essential business assets, and
• non business assets such that the net value is not to exceed $750,000.
Procedure for Application
Small Businesses in nominated EC areas who are seeking assistance need to complete the EC Application Form.
Completed applications should be forwarded to your nearest Rural Finance office with the EC Lenders Certificate.
Click here to locate your nearest Rural Finance office.
If further assistance or a printed application form is required please phone Rural Finance on 5448 2600.
If required, a Rural Finance officer will be in contact for a further discussion, which may include a personal interview or a farm visit.
The program is being administered through Rural Finance's Head Office located at:
57 View St , Bendigo
PO Box 1313
Bendigo Central 3552
Ph: 5448 2600
Fax: 5441 8901
Email: admin@ruralfinance.com.au
 EC Interest Subsidy Support Brochure - Small Businesses
The information contained in the above EC brochure is a simplified version of the guidelines issued by Department of Agriculture, Fisheries and Forestry. Click here to view the complete guideline document for the relevant EC declaration.
EC Application Form
EC Lenders Certificate
June 2009
|
|
|
