Summary Sheet
Small Business Exceptional Circumstances
Administering Agency
Minister for Primary Industries and Fisheries
Queensland Rural Adjustment Authority
Why the Support is Provided?
The objective of the scheme is to assist small businesses that are in financial difficulty due to their dependence on farming enterprises in an Exceptional Circumstance area and who would have had long-term prospects of viability had exceptional circumstances not happened.
The support will facilitate one or more of the following strategies:
● improvements in business viability;
● business continuity;
● debt restructuring.
What Support is Provided?
Assistance will be provided as an interest subsidy for new or existing commercial loans.
Level of Support
● The total amount of support payable in each exceptional circumstance period may not exceed $100 000 per small business, or part thereof if the declaration is less than 12 months.
● Applicants who own/lease/operate more than one small business will collectively only be eligible for one interest subsidy in each exceptional circumstance period on the commercial associated with the applicant’s small business.
● Applicants who are farmers and own/lease/operate one or more than one small business will collectively only be eligible for one interest subsidy in each exceptional circumstance period on the commercial associated with the applicant’s farm or small business.
● The level of support to be provided to the owner of a small business shall be determined by the extent of the support needed for the strategies as outlined in the above section and from budgets for the small business that allow for financial demands on the business appropriate to the exceptional circumstance.
● The interest subsidy granted to the owner of a small business in an Exceptional Circumstance period must not be greater than 80% of the interest payable on, and associated costs of, the loans for which an interest subsidy is sought. (Unless the area was declared after 6 November 2006 – see next point below)
●If an exceptional circumstance area was declared after 6 November 2006, the interest subsidy given for the first exceptional circumstance period must not be more than 50%.
● In deciding the level of leans to be supported for an initial interest subsidy, QRAA must deduct the full cost of a capital purchase from the balance of the existing loans if –
A) the capital purchase was made after 6 November 2006 for a small business that derives 70% or more of its business turnover from providing goods or services to farming enterprises in an exceptional circumstance area or part of an exceptional Circumstance area; or
B) the capital purchase was made after 24 September 2007 for a small business in a relevant town.
● Any Subsidies already given by the commonwealth or under the Small Business Emergency Assistance Scheme or the Exceptional Circumstance Scheme on loans or associated costs must be deducted from the amount received under this scheme
The Following Eligibility Criteria Apply:
In assessing the eligibility of an applicant for interest subsidy support, QRAA must be satisfied that:
To be eligible to receive interest subsidy support QRAA must be satisfied that:
● The applicant must:
a) own (whether as sole owner, in partnership or as a private company) and operate a small business; and
b) have owned the small business for at least two years; and
c) demonstrate that the small business derives 70% or more of its normal total business turnover from providing goods and services to farming enterprises in an Exceptional Circumstance declared area (or part thereof); or
d) the small business is located in a relevant town and is dependent on farming enterprises for all or part of its business turnover; and
e) the application is made after 24 September 2007 and before1 July 2009 or before the end of the Exceptional Circumstances declaration for the revelant areas; and
f) demonstrate under normal circumstances, the applicant or, for a private company, its shareholders, spend at least 75% of labour on the small business or, if the applicant is also an owner of a farming enterprise, spend at least 75% of their labour on the small business and the farming enterprise and obtain at least 50% of applicant’s total business turnover from the small business and
g) Demonstrate that the small business is in financial difficulty because of the impact of exceptional circumstances in farming enterprises in an exceptional circumstance area
● In deciding whether the small business is in financial difficulty, QRAA must consider:
a) the total amount of interest payable each year;
b) the estimated surplus over the medium term;
c) the applicant’s equity in the small business in relation to the amount of current and future indebtedness, together with both business and non-business assets and income.
● The assistance is necessary to achieve one or more of the strategies of improvements on business viability, business continuity or debt restructuring
● The applicant has disposed of on commercial terms:
a) all non–essential business assets and
b) non-business assets, so that the net value of non-business assets is not more than double the NewStart Allowance Assets Test for Homeowners (partnered), unless the following dot point applies ; and
c) has applied the proceeds to the small business enterprise (except where this would result in extreme hardship to the applicant)
● The net value of non-business assets increases to &750 000 for those applications made after 24 September 2007 and before 1 October 2008 (including the 28 day grace period), or before the closure of the exceptional circumstance area, whichever occurs first.
The $750,000 net value non-business assets only applies for up to one 12 month period of support.
NOTE: Investments in bona fide insurance and superannuation funds are exempt from non-business assets test.
● Without the assistance, the small business would not have the capacity to achieve or maintain long term viability.
● In assessing the likelihood of the small business being viable in the long term, each of the following will be taken into account:
a) the expected future capacity of the small business to operate profitably (without assistance under a rural adjustment scheme) as measured by its ability to meet, from estimated surpluses, its future financial commitments for each of the following:
i) its operating costs;
ii) living costs of the applicant’s family;
iii) servicing the small business’s debts;
iv) future capital requirements for plant and improvements; and
investment requirements to make the small business viable.
b) the long term economic trends impacting on the small business;
c) the applicant’s demonstrated technical, financial and business management performance;
d) the provision of financial support for the small business by lenders during and after the exceptional circumstances.
● Each loan for which the interest subsidy is sought is given on commercial terms at arms length and at an interest rate that is competitive with the rate generally applicable to loans of the same type.
● The owner of a small business not receiving assistance in a particular Exceptional Circumstance period may be eligible for assistance in a subsequent Exceptional Circumstance period.
Important Information:
Applications for assistance must be made on QRAA’s Small Business Application Form and be accompanied by the documents stated on the application form.
Applications must be lodged with QRAA not later than 28 days after the expiry date of the Exceptional Circumstances period for which the assistance is sought.
Payments made by QRAA may result in financial, taxation, legal or other implications. Primary producers are advised to seek inde3pendent professional advise in regards to possible implications before participating on the Small Business Drought Assistance (exceptional circumstance) Scheme.
In situations where GST applies to payments, QRAA will pay primary producers the applicable GST amounts, in addition to the approved payment. Applicants must disclose to the Australian Tax Office GST components received from QRAA. Primary producers unsure of their reporting or accounting requirements in relation to these GST receipts are advised to seek professional advice.
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Terms and conditions |
● Payment of the interest subsidy will be made to the lender on behalf of the owner, or direct to the owner after QRAA has secured agreement from the owner of the small business as to the use of the support.
● The owner of the small business and the lender shall agree to the terms and conditions of support.
● An owner of a small business receiving assistance under the scheme may continue to receive assistance only if the owner complies with the terms of the assistance.
● The giving of assistance in a particular Exceptional Circumstance period does not guarantee assistance in a subsequent Exceptional Circumstance period.
● The period of support shall be limited to a maximum period of 12 months and the applicant shall not make additional applications under this scheme during that time unless the final dot point applies.
● The applicant cannot apply for an interest rate subsidy until nine months after the day the applicant last makes a successful interest rate subsidy application. The applicant can receive only one subsidy [payment in each exceptional circumstance period unless the following dot point applies].
● The applicant has received an interest rate subsidy (the first subsidy) in an exceptional circumstance period, the applicant may make further application for assistance in the exceptional circumstance period if: a) The application relates to debt incurred in relation to carry-on finance provided to the applicant after the small business received the first subsidy; and b) The application is made on a pro-rata basis taking into account the amount of interest subsidy already paid to the applicant in the exceptional circumstance period and the proportion of the exceptional circumstance period remaining.
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What Costs are Involved?
No fees apply to this scheme.
Contact Details:
For further information or clarification, please contact the appropriate office. Please dial the prefix +61 7 instead of (07) when calling from outside Australia. Please note that you cannot dial 1800 numbers from outside Australia.
Brisbane Office
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Queensland Rural Adjustment Authority Level 9 307 Queen Street Brisbane Q 4001 Ph: (07) 3032 0100 Free call: 1800 623 946 Fax: (07) 3032 0180 Web site: www.qraa.qld.gov.au Email: us@qraa.qld.gov.au |
Regional Offices
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Bundaberg Client Liaison Officer Doug Johnstone Ph: (07) 4154 2874 Fax: (07) 3032 0392
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Innisfail Client Liaison Officer Sam Spina Ph: (07) 4064 2824 Fax: (07) 3032 0386 |
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Kingaroy Client Liaison Officer Jim Mackson Ph: (07) 4160 0716 Fax: (07) 3032 0388 |
Longreach Client Liaison Officer Bill Fletcher Ph: (07) 4658 2879 Fax (07) 3032 0391 |
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Mackay Client Liaison Officer Peter Crowley Ph: (07) 4967 0728 Fax: (07) 3032 0387 |
Rockhampton Client Liaison Officer Brendan Hamilton Ph: (07) 4936 1872 Fax:(07) 3032 0390 |
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Roma Client Liaison Officer Craig Turner Ph: (07) 4622 8527 Fax: (07) 3032 0389 |
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