By Chris Scheid.

 

Hi MG suppliers,

 

Below is the link for PIRSA “Dairy Recovery & Concessional Loans”.  To get to the core bits for you:

For “Drought Concessional Loans” start at Part A

For “Dairy Recovery & Concessional Loans”, start at Part B (page 28)

 

“Dairy Recovery & Concessional Loans” – eligibility:

  • supplier of MG (or Fonterra)
  • have borrowed up to 50% of ‘eligible debt’ (securitised debt to bank/processor)

 

“Dairy Recovery & Concessional Loans” – what can you use it for:

  • debt restructuring (eg creditors, term loans), new debt, productivity enhancements, operating expenses (eg employed labour, creditors but ‘operating expenses’ up to a limit – eg not owners labour) a combination of each –

 

“Dairy Recovery & Concessional Loans” – assessment criteria:

  • demonstrate repayment capacity and commercial viability (these are the antithesis and these tight assessment conditions by PIRSA caught many SA graziers out for Drought Concessional loans such that we have only had $3.7m of $60m drought concessional loans allocated with the scheme finished now 30/6/16  ie PIRSA thought graziers were (too) commercially viable, so no concessional loan OR they thought graziers were not commercially viable enough (ie could not repay debt even with the concessional loan) and so no drought concessional loan
  • securitised debt

 

“Dairy Recovery & Concessional Loans” – Features:

  • Pay up to a max $1m eligible debt (eg $3m of eligible – securitised – debt x 50% concessional loan = $1.5m but maximum concessional loan $1m);
  • 10 years (1st 5 years interest only, then P&I); interest at (today) 2.71%;
  • Security – registered mortgage over land (your bank maybe OK to give away the security + debt now but consider that asking them to take debt and security back in 10 years time is like another ‘loan application’ in their eyes)
  • Lodgement date – open ended but ‘first come, first served basis’

 

http://pir.sa.gov.au/__data/assets/pdf_file/0020/278003/SA_guidelines_-_Dairy_and_Drought_20160630.pdf

 

No doubt the SA Rural Financial Counselling Service will be there to support SA dairy farmers with application assistance

http://www.ruralbusinesssupport.org.au/

 

Hope that is of some help.

See many of you during the upcoming Dairy Farm Monitor data collection

Regards

Chris