Applications have now opened for the interest free loans as part of the State Government’s 2024 Drought Response. This program will be administered by The Rural Business Development Corporation via DPIRD and applications will need to be made via the SmartyGrant portal.

To assist clients in applying for this loan we have summarised below key criteria and attached some useful documents to use in the submission process. Since this assistance is via loan funding there is a lot more information to submit and boxes to tick in comparison to the grant application that has now closed. It appears that your accountant or a third party are not prohibited from completing and submitting the application on your behalf.

We note that applications close 30 November 2024 or when funding is fully committed. The grant funding was oversubscribed and some farmers did miss out, so we strongly urge you to submit your loan application as soon as possible.

Eligibility

To be eligible for a grant, the applicant must:

• Be operating a farm business, on a property within Western Australia (Note – a farm business is a primary production business that excludes Aquaculture, Forestry and Logging, Fishing, Hunting and Trapping, and Support Services).

• Have an ABN since at least 1 July 2021 and be registered for GST.

• Operate as a sole trader, partnership, trust or private company.

• Have owners or beneficiaries who, collectively, earn more than 50% of their total income from primary production in a normal year.

• At least one member of the applicant business spends at least 50% of their time on the farm business.

• Have gross farm income between $200,000 and $2.0 million in a normal year.

• The applicant must have an equity ratio between 50% and 70%, and no greater than $4 million based on their Statement of Assets & Liabilities.

• Off-farm assets to be no greater than $2.0 million (excluding assets in a complying superannuation fund).

• The applicant has not held funds in a Farm Management Deposit account since 1 January 2024.

• Demonstrate they have incurred direct costs of at least $25,000 on expenditure directly due to the impact of this dry season such as stockfeed and its transportation, water including cartage, transportation of livestock, or other drought preparedness measures.

Documentation

Documents that need to be provided:

• Rates notice or lease/share farm agreement for the property.

• Rates notice and/or lease/share farm agreement for the main farm property.

• Last two years business tax returns, balance sheets and financial statements of the applicant farm business (these include profit and loss statements, livestock trading account). Tax assessment notices are not adequate.

• Last two years individual taxation returns. Tax assessment notices are not adequate.

• Trust deeds (a full executed, signed and certified Trust deed and any amending supplementary deed for all trusts involved in the business structure) (if applicable)

• Current (01 Feb 2024 onwards) Statement of Assets and Liabilities of the applicant business, including individual members of the partnership, family trust, or company.

• Quarterly BAS statements from the date of the last prepared financial statements.

• Confirmation of existing debt e.g. loan/bank statements.

• A certified copy of documents that satisfy 100 point check requirements for the applicant, trustees, shareholders with greater than 25% shareholding, all authorised signatories (who would be signing a loan agreement), or persons with effective control.

• Most recent bank statement that matches applicant details.

• Property Identification Code (PIC) for those with livestock.

• The applicant declares in their application that they have not held funds in a Farm Management Deposit account since 1 January 2024.

• Invoices that show expenditure of more than $25,000 that has been incurred as a result of the dry season. Invoices since 01 December 2023 are acceptable. Expenditure would be on stockfeed, water, transportation, or the establishment of feed silos, water tanks, improved irrigation systems, or any other infrastructure that supports drought resilience.

How will this work?

The interest free loan guidelines are attached and we recommend that you read these thoroughly before commencing your application. In short:

• The interest free loan will be secured by a registered caveat over all of the applicant’s real estate property, provided there is adequate loan to security value.

• The loan will be interest free, with no repayments required for the first two years, then five principal repayments of $5,000 scheduled each 6 months during years three to five. These payments will be made via direct debit.

• The loan has a maximum term of five years and is expected to be cleared by then. Loans not repaid by the end of the five-year loan term will be charged interest at a commercial rate, raised 6 monthly on each 31 March and 30 September.

How to apply

Applications for the Hardship Support Grant are now open and must be submitted online via SmartyGrants (scroll down to “Interest-free Loan Scheme 2024”) - click here to access online.

Please download the below documents and read before applying:

1: FAQ sheet

2. Statement of assets & liabilities

3. 100 point checklist

4. Interest free loan guidelines

If you have any further questions please feel free to contact Jenna van Nierop via email: jennav@smiththornton.com.au who will be happy to assist.

Alternatively, you can contact DPIRD’s Rural Business Development Unit by email: ruralbusiness.developmentunit@dpird.wa.gov.au or by calling 08 9368 3082 (during business hours) before the closing date.