{"id":"F2020L00028","name":"Regional Investment Corporation (Small Business Drought Loans) Rules 2020","slug":"regional-investment-corporation-small-business-drought-loans-rules-2020","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":100568,"registerId":"commonwealth-F2020L00028-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Part 1","sectionType":"part","heading":"Preliminary","content":"## Part 1—Preliminary","sortOrder":0},{"sectionNumber":"1","sectionType":"section","heading":"Name","content":"#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Small Business Drought Loans) Rules 2020.","sortOrder":1},{"sectionNumber":"3","sectionType":"section","heading":"Authority","content":"#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.","sortOrder":2},{"sectionNumber":"4","sectionType":"section","heading":"Definitions","content":"#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) Corporation;\n    (c) Desertification Convention;\n    (d) responsible Ministers.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> drought‑affected small business has the meaning given by section 5.\n\n> maximum loan amount, for a drought‑affected small business, means the lesser of the following:\n\n    (a) an amount that is equal to 50% of the existing commercial debt of the business;\n    (b) $500,000.\n\n> program means the Small Business Drought Loans Program prescribed by section 6.\n\n> small business drought loan means a loan by the Corporation to a drought‑affected small business, of not more than the maximum loan amount for the business, for the purpose of providing working capital for the business or refinancing existing commercial debt owed by the business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.","sortOrder":3},{"sectionNumber":"5","sectionType":"section","heading":"What is a drought‑affected small business?","content":"#### 5 What is a drought‑affected small business?\n\n  (1) A business is a drought‑affected small business if all the requirements in this section are met in relation to the business.\n\n> Note: Extra conditions must be met for a loan to be made to the business under the Small Business Drought Loans program: see Division 3 of Part 2.\n\n  Substantial part of turnover from supplies to farm businesses\n  (2) A substantial part of the turnover of the business must be, or have been, from the business supplying, to farm businesses in affected areas, goods or services relating to primary production by those farm businesses.\n  Effect of drought on business\n  (3) As a consequence of drought affecting farm businesses in affected areas, there must have been:\n    (a) a material reduction in the turnover of the business; or\n    (b) a material increase in unsecured debts to the business by farm businesses.\n  Business has fewer than 20 employees\n  (4) The business must have fewer than 20 employees other than casual employees.\n  Business not a farm business\n  (5) The business must not be a farm business.","sortOrder":4},{"sectionNumber":"Part 2","sectionType":"part","heading":"Small Business Drought Loans Program","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Small Business Drought Loans) Rules 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) Corporation;\n    (c) Desertification Convention;\n    (d) responsible Ministers.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> drought‑affected small business has the meaning given by section 5.\n\n> maximum loan amount, for a drought‑affected small business, means the lesser of the following:\n\n    (a) an amount that is equal to 50% of the existing commercial debt of the business;\n    (b) $500,000.\n\n> program means the Small Business Drought Loans Program prescribed by section 6.\n\n> small business drought loan means a loan by the Corporation to a drought‑affected small business, of not more than the maximum loan amount for the business, for the purpose of providing working capital for the business or refinancing existing commercial debt owed by the business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n#### 5 What is a drought‑affected small business?\n\n  (1) A business is a drought‑affected small business if all the requirements in this section are met in relation to the business.\n\n> Note: Extra conditions must be met for a loan to be made to the business under the Small Business Drought Loans program: see Division 3 of Part 2.\n\n  Substantial part of turnover from supplies to farm businesses\n  (2) A substantial part of the turnover of the business must be, or have been, from the business supplying, to farm businesses in affected areas, goods or services relating to primary production by those farm businesses.\n  Effect of drought on business\n  (3) As a consequence of drought affecting farm businesses in affected areas, there must have been:\n    (a) a material reduction in the turnover of the business; or\n    (b) a material increase in unsecured debts to the business by farm businesses.\n  Business has fewer than 20 employees\n  (4) The business must have fewer than 20 employees other than casual employees.\n  Business not a farm business\n  (5) The business must not be a farm business.\n\n## Part 2—Small Business Drought Loans Program\n\n### Division 1—Prescribing Small Business Drought Loans Program\n\n#### 6 Small Business Drought Loans Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Small Business Drought Loans Program.\n  (2) The Small Business Drought Loans Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for small business drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making small business drought loans in accordance with Division 3;\n    (iii) determining in accordance with Division 4 the terms and conditions on which small business drought loans are made;\n    (iv) taking security for small business drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to small business drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, small business drought loans, and if required, enforcing security taken for small business drought loans, in accordance with Division 5;\n    (vii) reviewing periodically small business drought loans and the terms and conditions on which they are made;\n    (viii) dealing with debts relating to small business drought loans in accordance with Division 6;\n    (ix) reporting to the responsible Ministers on small business drought loans in accordance with Division 7; and\n    (b) relates to small business drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the Desertification Convention.\n\n### Division 2—Dealing with applications for small business drought loans\n\n#### 8 Informing applicants of outcome of applications for small business drought loans\n\n  The Corporation must ensure that applicants for small business drought loans are informed of the outcomes of their loan applications as soon as practicable after decisions on their applications have been made.\n\n### Division 3—Making small business drought loans\n\n#### 9 Small business drought loans to be made only on application\n\n  The Corporation may make a small business drought loan to a drought‑affected small business only if the business makes an application for the loan that:\n    (a) is in writing; and\n    (b) includes the information (if any) required by the Corporation; and\n    (c) is accompanied by the documents (if any) required by the Corporation.\n\n#### 10 Capacity to repay loan and provide security\n\n  The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is assessed as having the capacity to repay the loan; and\n    (b) sufficient security for the loan is provided by the business.\n\n#### 11 Extra preconditions for making small business drought loans\n\n  (1) The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is in financial need of a concessional loan; and\n    (b) the business is assessed as financially viable, or as having sound prospects of a return to financial viability within 10 years; and\n    (c) the business owes commercial debt; and\n    (d) throughout the 6 months before the business applied for the loan, the business had fewer than 20 employees other than casual employees; and\n    (e) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than a public company (within the meaning of that Act), whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members); and\n    (f) the entity carrying on the business is registered for tax purposes in Australia with an Australian Business Number (ABN) and registered under the A New Tax System (Goods and Services Tax) Act 1999; and\n    (g) the entity carrying on the business is not subject to external administration or bankruptcy.\n\n> Note: The Board has the function of ensuring that the Corporation has procedures for review of decisions to make or refuse small business drought loans: see section 24.\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person whose principal business pursuit (in terms of the majority of the person’s own labour and income) is the drought‑affected small business.\n\n### Division 4—Determining terms and conditions of small business drought loans\n\n#### 12 Extra terms and conditions of small business drought loans\n\n  The Corporation may determine the terms and conditions on which a small business drought loan is made.\n\n> Note: The loan needs to be subject to the terms and conditions mentioned in the definition of small business drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 14 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of small business drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 15 Decisions on foreclosure to be made by Board\n\n  Any decision of the Corporation on foreclosure on a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to small business drought loans\n\n#### 16 Mediation\n\n  The Corporation must offer to undertake mediation relating to debts relating to small business drought loans and, if the offer is accepted, undertake the mediation.\n\n#### 17 Waiver\n\n  A decision of the Corporation to waive debt relating to a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board) after consulting the responsible Ministers and taking their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 18 Quarterly reporting\n\n  The Corporation must provide a report on small business drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of small business drought loans; and\n    (b) details of the portfolio of small business drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about small business drought loans to the responsible Ministers on request: see section 23.\n\n### Division 8—Funding of small business drought loans\n\n#### 19 Funding of small business drought loans\n\n  (1) The Corporation will be funded to make small business drought loans through an appropriation made by an Act.\n  (2) Funds for small business drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of small business drought loans; and\n    (b) only use funds provided for small business drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 20 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to the program.\n\n#### 21 Directions by responsible Ministers\n\n  For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program (other than directions that direct, or have the effect of directing, the Corporation in relation to a particular small business drought loan).\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 22 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about:\n    (i) the types of security the Corporation will consider and require for small business drought loans; and\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse small business drought loans and the process for requesting such reviews; and\n    (b) publishing the guidelines.\n\n#### 23 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about small business drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of small business drought loans.\n\n### Division 2—Board functions\n\n#### 24 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures, for reviewing decisions (the original decisions) to make or refuse small business drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 26 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops policies and procedures described in subsection (2), taking into account the following matters:\n    (i) the concessional nature of small business drought loans;\n    (ii) the effect on drought‑affected small businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures taking those matters into account.\n  (2) Subsection (1) applies to policies and procedures for managing small business drought loans in a prudential manner to minimise the risk of default, including policies and procedures for:\n    (a) arrears management; and\n    (b) recovery action; and\n    (c) foreclosure arrangements; and\n    (d) waiving debt after consulting the responsible Ministers; and\n    (e) writing off debt; and\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 27 Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020.\n\n  (2) Where an application for a small business drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 28 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 13 after the day on which this section commences.\n\n#### 29 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":5},{"sectionNumber":"Division 1","sectionType":"division","heading":"Prescribing Small Business Drought Loans Program","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Small Business Drought Loans) Rules 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) Corporation;\n    (c) Desertification Convention;\n    (d) responsible Ministers.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> drought‑affected small business has the meaning given by section 5.\n\n> maximum loan amount, for a drought‑affected small business, means the lesser of the following:\n\n    (a) an amount that is equal to 50% of the existing commercial debt of the business;\n    (b) $500,000.\n\n> program means the Small Business Drought Loans Program prescribed by section 6.\n\n> small business drought loan means a loan by the Corporation to a drought‑affected small business, of not more than the maximum loan amount for the business, for the purpose of providing working capital for the business or refinancing existing commercial debt owed by the business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n#### 5 What is a drought‑affected small business?\n\n  (1) A business is a drought‑affected small business if all the requirements in this section are met in relation to the business.\n\n> Note: Extra conditions must be met for a loan to be made to the business under the Small Business Drought Loans program: see Division 3 of Part 2.\n\n  Substantial part of turnover from supplies to farm businesses\n  (2) A substantial part of the turnover of the business must be, or have been, from the business supplying, to farm businesses in affected areas, goods or services relating to primary production by those farm businesses.\n  Effect of drought on business\n  (3) As a consequence of drought affecting farm businesses in affected areas, there must have been:\n    (a) a material reduction in the turnover of the business; or\n    (b) a material increase in unsecured debts to the business by farm businesses.\n  Business has fewer than 20 employees\n  (4) The business must have fewer than 20 employees other than casual employees.\n  Business not a farm business\n  (5) The business must not be a farm business.\n\n## Part 2—Small Business Drought Loans Program\n\n### Division 1—Prescribing Small Business Drought Loans Program\n\n#### 6 Small Business Drought Loans Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Small Business Drought Loans Program.\n  (2) The Small Business Drought Loans Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for small business drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making small business drought loans in accordance with Division 3;\n    (iii) determining in accordance with Division 4 the terms and conditions on which small business drought loans are made;\n    (iv) taking security for small business drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to small business drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, small business drought loans, and if required, enforcing security taken for small business drought loans, in accordance with Division 5;\n    (vii) reviewing periodically small business drought loans and the terms and conditions on which they are made;\n    (viii) dealing with debts relating to small business drought loans in accordance with Division 6;\n    (ix) reporting to the responsible Ministers on small business drought loans in accordance with Division 7; and\n    (b) relates to small business drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the Desertification Convention.\n\n### Division 2—Dealing with applications for small business drought loans\n\n#### 8 Informing applicants of outcome of applications for small business drought loans\n\n  The Corporation must ensure that applicants for small business drought loans are informed of the outcomes of their loan applications as soon as practicable after decisions on their applications have been made.\n\n### Division 3—Making small business drought loans\n\n#### 9 Small business drought loans to be made only on application\n\n  The Corporation may make a small business drought loan to a drought‑affected small business only if the business makes an application for the loan that:\n    (a) is in writing; and\n    (b) includes the information (if any) required by the Corporation; and\n    (c) is accompanied by the documents (if any) required by the Corporation.\n\n#### 10 Capacity to repay loan and provide security\n\n  The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is assessed as having the capacity to repay the loan; and\n    (b) sufficient security for the loan is provided by the business.\n\n#### 11 Extra preconditions for making small business drought loans\n\n  (1) The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is in financial need of a concessional loan; and\n    (b) the business is assessed as financially viable, or as having sound prospects of a return to financial viability within 10 years; and\n    (c) the business owes commercial debt; and\n    (d) throughout the 6 months before the business applied for the loan, the business had fewer than 20 employees other than casual employees; and\n    (e) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than a public company (within the meaning of that Act), whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members); and\n    (f) the entity carrying on the business is registered for tax purposes in Australia with an Australian Business Number (ABN) and registered under the A New Tax System (Goods and Services Tax) Act 1999; and\n    (g) the entity carrying on the business is not subject to external administration or bankruptcy.\n\n> Note: The Board has the function of ensuring that the Corporation has procedures for review of decisions to make or refuse small business drought loans: see section 24.\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person whose principal business pursuit (in terms of the majority of the person’s own labour and income) is the drought‑affected small business.\n\n### Division 4—Determining terms and conditions of small business drought loans\n\n#### 12 Extra terms and conditions of small business drought loans\n\n  The Corporation may determine the terms and conditions on which a small business drought loan is made.\n\n> Note: The loan needs to be subject to the terms and conditions mentioned in the definition of small business drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 14 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of small business drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 15 Decisions on foreclosure to be made by Board\n\n  Any decision of the Corporation on foreclosure on a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to small business drought loans\n\n#### 16 Mediation\n\n  The Corporation must offer to undertake mediation relating to debts relating to small business drought loans and, if the offer is accepted, undertake the mediation.\n\n#### 17 Waiver\n\n  A decision of the Corporation to waive debt relating to a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board) after consulting the responsible Ministers and taking their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 18 Quarterly reporting\n\n  The Corporation must provide a report on small business drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of small business drought loans; and\n    (b) details of the portfolio of small business drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about small business drought loans to the responsible Ministers on request: see section 23.\n\n### Division 8—Funding of small business drought loans\n\n#### 19 Funding of small business drought loans\n\n  (1) The Corporation will be funded to make small business drought loans through an appropriation made by an Act.\n  (2) Funds for small business drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of small business drought loans; and\n    (b) only use funds provided for small business drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 20 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to the program.\n\n#### 21 Directions by responsible Ministers\n\n  For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program (other than directions that direct, or have the effect of directing, the Corporation in relation to a particular small business drought loan).\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 22 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about:\n    (i) the types of security the Corporation will consider and require for small business drought loans; and\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse small business drought loans and the process for requesting such reviews; and\n    (b) publishing the guidelines.\n\n#### 23 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about small business drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of small business drought loans.\n\n### Division 2—Board functions\n\n#### 24 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures, for reviewing decisions (the original decisions) to make or refuse small business drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 26 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops policies and procedures described in subsection (2), taking into account the following matters:\n    (i) the concessional nature of small business drought loans;\n    (ii) the effect on drought‑affected small businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures taking those matters into account.\n  (2) Subsection (1) applies to policies and procedures for managing small business drought loans in a prudential manner to minimise the risk of default, including policies and procedures for:\n    (a) arrears management; and\n    (b) recovery action; and\n    (c) foreclosure arrangements; and\n    (d) waiving debt after consulting the responsible Ministers; and\n    (e) writing off debt; and\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 27 Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020.\n\n  (2) Where an application for a small business drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 28 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 13 after the day on which this section commences.\n\n#### 29 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":6},{"sectionNumber":"6","sectionType":"section","heading":"Small Business Drought Loans Program prescribed","content":"#### 6 Small Business Drought Loans Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Small Business Drought Loans Program.\n  (2) The Small Business Drought Loans Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for small business drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making small business drought loans in accordance with Division 3;\n    (iii) determining in accordance with Division 4 the terms and conditions on which small business drought loans are made;\n    (iv) taking security for small business drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to small business drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, small business drought loans, and if required, enforcing security taken for small business drought loans, in accordance with Division 5;\n    (vii) reviewing periodically small business drought loans and the terms and conditions on which they are made;\n    (viii) dealing with debts relating to small business drought loans in accordance with Division 6;\n    (ix) reporting to the responsible Ministers on small business drought loans in accordance with Division 7; and\n    (b) relates to small business drought loans funded in accordance with Division 8.","sortOrder":7},{"sectionNumber":"7","sectionType":"section","heading":"Constitutional basis for program","content":"#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the Desertification Convention.","sortOrder":8},{"sectionNumber":"Division 2","sectionType":"division","heading":"Dealing with applications for small business drought loans","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Small Business Drought Loans) Rules 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) Corporation;\n    (c) Desertification Convention;\n    (d) responsible Ministers.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> drought‑affected small business has the meaning given by section 5.\n\n> maximum loan amount, for a drought‑affected small business, means the lesser of the following:\n\n    (a) an amount that is equal to 50% of the existing commercial debt of the business;\n    (b) $500,000.\n\n> program means the Small Business Drought Loans Program prescribed by section 6.\n\n> small business drought loan means a loan by the Corporation to a drought‑affected small business, of not more than the maximum loan amount for the business, for the purpose of providing working capital for the business or refinancing existing commercial debt owed by the business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n#### 5 What is a drought‑affected small business?\n\n  (1) A business is a drought‑affected small business if all the requirements in this section are met in relation to the business.\n\n> Note: Extra conditions must be met for a loan to be made to the business under the Small Business Drought Loans program: see Division 3 of Part 2.\n\n  Substantial part of turnover from supplies to farm businesses\n  (2) A substantial part of the turnover of the business must be, or have been, from the business supplying, to farm businesses in affected areas, goods or services relating to primary production by those farm businesses.\n  Effect of drought on business\n  (3) As a consequence of drought affecting farm businesses in affected areas, there must have been:\n    (a) a material reduction in the turnover of the business; or\n    (b) a material increase in unsecured debts to the business by farm businesses.\n  Business has fewer than 20 employees\n  (4) The business must have fewer than 20 employees other than casual employees.\n  Business not a farm business\n  (5) The business must not be a farm business.\n\n## Part 2—Small Business Drought Loans Program\n\n### Division 1—Prescribing Small Business Drought Loans Program\n\n#### 6 Small Business Drought Loans Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Small Business Drought Loans Program.\n  (2) The Small Business Drought Loans Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for small business drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making small business drought loans in accordance with Division 3;\n    (iii) determining in accordance with Division 4 the terms and conditions on which small business drought loans are made;\n    (iv) taking security for small business drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to small business drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, small business drought loans, and if required, enforcing security taken for small business drought loans, in accordance with Division 5;\n    (vii) reviewing periodically small business drought loans and the terms and conditions on which they are made;\n    (viii) dealing with debts relating to small business drought loans in accordance with Division 6;\n    (ix) reporting to the responsible Ministers on small business drought loans in accordance with Division 7; and\n    (b) relates to small business drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the Desertification Convention.\n\n### Division 2—Dealing with applications for small business drought loans\n\n#### 8 Informing applicants of outcome of applications for small business drought loans\n\n  The Corporation must ensure that applicants for small business drought loans are informed of the outcomes of their loan applications as soon as practicable after decisions on their applications have been made.\n\n### Division 3—Making small business drought loans\n\n#### 9 Small business drought loans to be made only on application\n\n  The Corporation may make a small business drought loan to a drought‑affected small business only if the business makes an application for the loan that:\n    (a) is in writing; and\n    (b) includes the information (if any) required by the Corporation; and\n    (c) is accompanied by the documents (if any) required by the Corporation.\n\n#### 10 Capacity to repay loan and provide security\n\n  The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is assessed as having the capacity to repay the loan; and\n    (b) sufficient security for the loan is provided by the business.\n\n#### 11 Extra preconditions for making small business drought loans\n\n  (1) The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is in financial need of a concessional loan; and\n    (b) the business is assessed as financially viable, or as having sound prospects of a return to financial viability within 10 years; and\n    (c) the business owes commercial debt; and\n    (d) throughout the 6 months before the business applied for the loan, the business had fewer than 20 employees other than casual employees; and\n    (e) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than a public company (within the meaning of that Act), whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members); and\n    (f) the entity carrying on the business is registered for tax purposes in Australia with an Australian Business Number (ABN) and registered under the A New Tax System (Goods and Services Tax) Act 1999; and\n    (g) the entity carrying on the business is not subject to external administration or bankruptcy.\n\n> Note: The Board has the function of ensuring that the Corporation has procedures for review of decisions to make or refuse small business drought loans: see section 24.\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person whose principal business pursuit (in terms of the majority of the person’s own labour and income) is the drought‑affected small business.\n\n### Division 4—Determining terms and conditions of small business drought loans\n\n#### 12 Extra terms and conditions of small business drought loans\n\n  The Corporation may determine the terms and conditions on which a small business drought loan is made.\n\n> Note: The loan needs to be subject to the terms and conditions mentioned in the definition of small business drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 14 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of small business drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 15 Decisions on foreclosure to be made by Board\n\n  Any decision of the Corporation on foreclosure on a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to small business drought loans\n\n#### 16 Mediation\n\n  The Corporation must offer to undertake mediation relating to debts relating to small business drought loans and, if the offer is accepted, undertake the mediation.\n\n#### 17 Waiver\n\n  A decision of the Corporation to waive debt relating to a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board) after consulting the responsible Ministers and taking their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 18 Quarterly reporting\n\n  The Corporation must provide a report on small business drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of small business drought loans; and\n    (b) details of the portfolio of small business drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about small business drought loans to the responsible Ministers on request: see section 23.\n\n### Division 8—Funding of small business drought loans\n\n#### 19 Funding of small business drought loans\n\n  (1) The Corporation will be funded to make small business drought loans through an appropriation made by an Act.\n  (2) Funds for small business drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of small business drought loans; and\n    (b) only use funds provided for small business drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 20 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to the program.\n\n#### 21 Directions by responsible Ministers\n\n  For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program (other than directions that direct, or have the effect of directing, the Corporation in relation to a particular small business drought loan).\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 22 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about:\n    (i) the types of security the Corporation will consider and require for small business drought loans; and\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse small business drought loans and the process for requesting such reviews; and\n    (b) publishing the guidelines.\n\n#### 23 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about small business drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of small business drought loans.\n\n### Division 2—Board functions\n\n#### 24 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures, for reviewing decisions (the original decisions) to make or refuse small business drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 26 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops policies and procedures described in subsection (2), taking into account the following matters:\n    (i) the concessional nature of small business drought loans;\n    (ii) the effect on drought‑affected small businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures taking those matters into account.\n  (2) Subsection (1) applies to policies and procedures for managing small business drought loans in a prudential manner to minimise the risk of default, including policies and procedures for:\n    (a) arrears management; and\n    (b) recovery action; and\n    (c) foreclosure arrangements; and\n    (d) waiving debt after consulting the responsible Ministers; and\n    (e) writing off debt; and\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 27 Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020.\n\n  (2) Where an application for a small business drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 28 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 13 after the day on which this section commences.\n\n#### 29 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":9},{"sectionNumber":"8","sectionType":"section","heading":"Informing applicants of outcome of applications for small business drought loans","content":"#### 8 Informing applicants of outcome of applications for small business drought loans\n\n  The Corporation must ensure that applicants for small business drought loans are informed of the outcomes of their loan applications as soon as practicable after decisions on their applications have been made.","sortOrder":10},{"sectionNumber":"Division 3","sectionType":"division","heading":"Making small business drought loans","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Small Business Drought Loans) Rules 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) Corporation;\n    (c) Desertification Convention;\n    (d) responsible Ministers.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> drought‑affected small business has the meaning given by section 5.\n\n> maximum loan amount, for a drought‑affected small business, means the lesser of the following:\n\n    (a) an amount that is equal to 50% of the existing commercial debt of the business;\n    (b) $500,000.\n\n> program means the Small Business Drought Loans Program prescribed by section 6.\n\n> small business drought loan means a loan by the Corporation to a drought‑affected small business, of not more than the maximum loan amount for the business, for the purpose of providing working capital for the business or refinancing existing commercial debt owed by the business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n#### 5 What is a drought‑affected small business?\n\n  (1) A business is a drought‑affected small business if all the requirements in this section are met in relation to the business.\n\n> Note: Extra conditions must be met for a loan to be made to the business under the Small Business Drought Loans program: see Division 3 of Part 2.\n\n  Substantial part of turnover from supplies to farm businesses\n  (2) A substantial part of the turnover of the business must be, or have been, from the business supplying, to farm businesses in affected areas, goods or services relating to primary production by those farm businesses.\n  Effect of drought on business\n  (3) As a consequence of drought affecting farm businesses in affected areas, there must have been:\n    (a) a material reduction in the turnover of the business; or\n    (b) a material increase in unsecured debts to the business by farm businesses.\n  Business has fewer than 20 employees\n  (4) The business must have fewer than 20 employees other than casual employees.\n  Business not a farm business\n  (5) The business must not be a farm business.\n\n## Part 2—Small Business Drought Loans Program\n\n### Division 1—Prescribing Small Business Drought Loans Program\n\n#### 6 Small Business Drought Loans Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Small Business Drought Loans Program.\n  (2) The Small Business Drought Loans Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for small business drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making small business drought loans in accordance with Division 3;\n    (iii) determining in accordance with Division 4 the terms and conditions on which small business drought loans are made;\n    (iv) taking security for small business drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to small business drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, small business drought loans, and if required, enforcing security taken for small business drought loans, in accordance with Division 5;\n    (vii) reviewing periodically small business drought loans and the terms and conditions on which they are made;\n    (viii) dealing with debts relating to small business drought loans in accordance with Division 6;\n    (ix) reporting to the responsible Ministers on small business drought loans in accordance with Division 7; and\n    (b) relates to small business drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the Desertification Convention.\n\n### Division 2—Dealing with applications for small business drought loans\n\n#### 8 Informing applicants of outcome of applications for small business drought loans\n\n  The Corporation must ensure that applicants for small business drought loans are informed of the outcomes of their loan applications as soon as practicable after decisions on their applications have been made.\n\n### Division 3—Making small business drought loans\n\n#### 9 Small business drought loans to be made only on application\n\n  The Corporation may make a small business drought loan to a drought‑affected small business only if the business makes an application for the loan that:\n    (a) is in writing; and\n    (b) includes the information (if any) required by the Corporation; and\n    (c) is accompanied by the documents (if any) required by the Corporation.\n\n#### 10 Capacity to repay loan and provide security\n\n  The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is assessed as having the capacity to repay the loan; and\n    (b) sufficient security for the loan is provided by the business.\n\n#### 11 Extra preconditions for making small business drought loans\n\n  (1) The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is in financial need of a concessional loan; and\n    (b) the business is assessed as financially viable, or as having sound prospects of a return to financial viability within 10 years; and\n    (c) the business owes commercial debt; and\n    (d) throughout the 6 months before the business applied for the loan, the business had fewer than 20 employees other than casual employees; and\n    (e) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than a public company (within the meaning of that Act), whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members); and\n    (f) the entity carrying on the business is registered for tax purposes in Australia with an Australian Business Number (ABN) and registered under the A New Tax System (Goods and Services Tax) Act 1999; and\n    (g) the entity carrying on the business is not subject to external administration or bankruptcy.\n\n> Note: The Board has the function of ensuring that the Corporation has procedures for review of decisions to make or refuse small business drought loans: see section 24.\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person whose principal business pursuit (in terms of the majority of the person’s own labour and income) is the drought‑affected small business.\n\n### Division 4—Determining terms and conditions of small business drought loans\n\n#### 12 Extra terms and conditions of small business drought loans\n\n  The Corporation may determine the terms and conditions on which a small business drought loan is made.\n\n> Note: The loan needs to be subject to the terms and conditions mentioned in the definition of small business drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 14 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of small business drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 15 Decisions on foreclosure to be made by Board\n\n  Any decision of the Corporation on foreclosure on a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to small business drought loans\n\n#### 16 Mediation\n\n  The Corporation must offer to undertake mediation relating to debts relating to small business drought loans and, if the offer is accepted, undertake the mediation.\n\n#### 17 Waiver\n\n  A decision of the Corporation to waive debt relating to a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board) after consulting the responsible Ministers and taking their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 18 Quarterly reporting\n\n  The Corporation must provide a report on small business drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of small business drought loans; and\n    (b) details of the portfolio of small business drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about small business drought loans to the responsible Ministers on request: see section 23.\n\n### Division 8—Funding of small business drought loans\n\n#### 19 Funding of small business drought loans\n\n  (1) The Corporation will be funded to make small business drought loans through an appropriation made by an Act.\n  (2) Funds for small business drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of small business drought loans; and\n    (b) only use funds provided for small business drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 20 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to the program.\n\n#### 21 Directions by responsible Ministers\n\n  For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program (other than directions that direct, or have the effect of directing, the Corporation in relation to a particular small business drought loan).\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 22 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about:\n    (i) the types of security the Corporation will consider and require for small business drought loans; and\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse small business drought loans and the process for requesting such reviews; and\n    (b) publishing the guidelines.\n\n#### 23 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about small business drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of small business drought loans.\n\n### Division 2—Board functions\n\n#### 24 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures, for reviewing decisions (the original decisions) to make or refuse small business drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 26 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops policies and procedures described in subsection (2), taking into account the following matters:\n    (i) the concessional nature of small business drought loans;\n    (ii) the effect on drought‑affected small businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures taking those matters into account.\n  (2) Subsection (1) applies to policies and procedures for managing small business drought loans in a prudential manner to minimise the risk of default, including policies and procedures for:\n    (a) arrears management; and\n    (b) recovery action; and\n    (c) foreclosure arrangements; and\n    (d) waiving debt after consulting the responsible Ministers; and\n    (e) writing off debt; and\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 27 Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020.\n\n  (2) Where an application for a small business drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 28 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 13 after the day on which this section commences.\n\n#### 29 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":11},{"sectionNumber":"9","sectionType":"section","heading":"Small business drought loans to be made only on application","content":"#### 9 Small business drought loans to be made only on application\n\n  The Corporation may make a small business drought loan to a drought‑affected small business only if the business makes an application for the loan that:\n    (a) is in writing; and\n    (b) includes the information (if any) required by the Corporation; and\n    (c) is accompanied by the documents (if any) required by the Corporation.","sortOrder":12},{"sectionNumber":"10","sectionType":"section","heading":"Capacity to repay loan and provide security","content":"#### 10 Capacity to repay loan and provide security\n\n  The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is assessed as having the capacity to repay the loan; and\n    (b) sufficient security for the loan is provided by the business.","sortOrder":13},{"sectionNumber":"11","sectionType":"section","heading":"Extra preconditions for making small business drought loans","content":"#### 11 Extra preconditions for making small business drought loans\n\n  (1) The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is in financial need of a concessional loan; and\n    (b) the business is assessed as financially viable, or as having sound prospects of a return to financial viability within 10 years; and\n    (c) the business owes commercial debt; and\n    (d) throughout the 6 months before the business applied for the loan, the business had fewer than 20 employees other than casual employees; and\n    (e) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than a public company (within the meaning of that Act), whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members); and\n    (f) the entity carrying on the business is registered for tax purposes in Australia with an Australian Business Number (ABN) and registered under the A New Tax System (Goods and Services Tax) Act 1999; and\n    (g) the entity carrying on the business is not subject to external administration or bankruptcy.\n\n> Note: The Board has the function of ensuring that the Corporation has procedures for review of decisions to make or refuse small business drought loans: see section 24.\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person whose principal business pursuit (in terms of the majority of the person’s own labour and income) is the drought‑affected small business.","sortOrder":14},{"sectionNumber":"Division 4","sectionType":"division","heading":"Determining terms and conditions of small business drought loans","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Small Business Drought Loans) Rules 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) Corporation;\n    (c) Desertification Convention;\n    (d) responsible Ministers.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> drought‑affected small business has the meaning given by section 5.\n\n> maximum loan amount, for a drought‑affected small business, means the lesser of the following:\n\n    (a) an amount that is equal to 50% of the existing commercial debt of the business;\n    (b) $500,000.\n\n> program means the Small Business Drought Loans Program prescribed by section 6.\n\n> small business drought loan means a loan by the Corporation to a drought‑affected small business, of not more than the maximum loan amount for the business, for the purpose of providing working capital for the business or refinancing existing commercial debt owed by the business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n#### 5 What is a drought‑affected small business?\n\n  (1) A business is a drought‑affected small business if all the requirements in this section are met in relation to the business.\n\n> Note: Extra conditions must be met for a loan to be made to the business under the Small Business Drought Loans program: see Division 3 of Part 2.\n\n  Substantial part of turnover from supplies to farm businesses\n  (2) A substantial part of the turnover of the business must be, or have been, from the business supplying, to farm businesses in affected areas, goods or services relating to primary production by those farm businesses.\n  Effect of drought on business\n  (3) As a consequence of drought affecting farm businesses in affected areas, there must have been:\n    (a) a material reduction in the turnover of the business; or\n    (b) a material increase in unsecured debts to the business by farm businesses.\n  Business has fewer than 20 employees\n  (4) The business must have fewer than 20 employees other than casual employees.\n  Business not a farm business\n  (5) The business must not be a farm business.\n\n## Part 2—Small Business Drought Loans Program\n\n### Division 1—Prescribing Small Business Drought Loans Program\n\n#### 6 Small Business Drought Loans Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Small Business Drought Loans Program.\n  (2) The Small Business Drought Loans Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for small business drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making small business drought loans in accordance with Division 3;\n    (iii) determining in accordance with Division 4 the terms and conditions on which small business drought loans are made;\n    (iv) taking security for small business drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to small business drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, small business drought loans, and if required, enforcing security taken for small business drought loans, in accordance with Division 5;\n    (vii) reviewing periodically small business drought loans and the terms and conditions on which they are made;\n    (viii) dealing with debts relating to small business drought loans in accordance with Division 6;\n    (ix) reporting to the responsible Ministers on small business drought loans in accordance with Division 7; and\n    (b) relates to small business drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the Desertification Convention.\n\n### Division 2—Dealing with applications for small business drought loans\n\n#### 8 Informing applicants of outcome of applications for small business drought loans\n\n  The Corporation must ensure that applicants for small business drought loans are informed of the outcomes of their loan applications as soon as practicable after decisions on their applications have been made.\n\n### Division 3—Making small business drought loans\n\n#### 9 Small business drought loans to be made only on application\n\n  The Corporation may make a small business drought loan to a drought‑affected small business only if the business makes an application for the loan that:\n    (a) is in writing; and\n    (b) includes the information (if any) required by the Corporation; and\n    (c) is accompanied by the documents (if any) required by the Corporation.\n\n#### 10 Capacity to repay loan and provide security\n\n  The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is assessed as having the capacity to repay the loan; and\n    (b) sufficient security for the loan is provided by the business.\n\n#### 11 Extra preconditions for making small business drought loans\n\n  (1) The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is in financial need of a concessional loan; and\n    (b) the business is assessed as financially viable, or as having sound prospects of a return to financial viability within 10 years; and\n    (c) the business owes commercial debt; and\n    (d) throughout the 6 months before the business applied for the loan, the business had fewer than 20 employees other than casual employees; and\n    (e) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than a public company (within the meaning of that Act), whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members); and\n    (f) the entity carrying on the business is registered for tax purposes in Australia with an Australian Business Number (ABN) and registered under the A New Tax System (Goods and Services Tax) Act 1999; and\n    (g) the entity carrying on the business is not subject to external administration or bankruptcy.\n\n> Note: The Board has the function of ensuring that the Corporation has procedures for review of decisions to make or refuse small business drought loans: see section 24.\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person whose principal business pursuit (in terms of the majority of the person’s own labour and income) is the drought‑affected small business.\n\n### Division 4—Determining terms and conditions of small business drought loans\n\n#### 12 Extra terms and conditions of small business drought loans\n\n  The Corporation may determine the terms and conditions on which a small business drought loan is made.\n\n> Note: The loan needs to be subject to the terms and conditions mentioned in the definition of small business drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 14 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of small business drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 15 Decisions on foreclosure to be made by Board\n\n  Any decision of the Corporation on foreclosure on a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to small business drought loans\n\n#### 16 Mediation\n\n  The Corporation must offer to undertake mediation relating to debts relating to small business drought loans and, if the offer is accepted, undertake the mediation.\n\n#### 17 Waiver\n\n  A decision of the Corporation to waive debt relating to a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board) after consulting the responsible Ministers and taking their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 18 Quarterly reporting\n\n  The Corporation must provide a report on small business drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of small business drought loans; and\n    (b) details of the portfolio of small business drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about small business drought loans to the responsible Ministers on request: see section 23.\n\n### Division 8—Funding of small business drought loans\n\n#### 19 Funding of small business drought loans\n\n  (1) The Corporation will be funded to make small business drought loans through an appropriation made by an Act.\n  (2) Funds for small business drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of small business drought loans; and\n    (b) only use funds provided for small business drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 20 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to the program.\n\n#### 21 Directions by responsible Ministers\n\n  For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program (other than directions that direct, or have the effect of directing, the Corporation in relation to a particular small business drought loan).\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 22 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about:\n    (i) the types of security the Corporation will consider and require for small business drought loans; and\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse small business drought loans and the process for requesting such reviews; and\n    (b) publishing the guidelines.\n\n#### 23 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about small business drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of small business drought loans.\n\n### Division 2—Board functions\n\n#### 24 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures, for reviewing decisions (the original decisions) to make or refuse small business drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 26 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops policies and procedures described in subsection (2), taking into account the following matters:\n    (i) the concessional nature of small business drought loans;\n    (ii) the effect on drought‑affected small businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures taking those matters into account.\n  (2) Subsection (1) applies to policies and procedures for managing small business drought loans in a prudential manner to minimise the risk of default, including policies and procedures for:\n    (a) arrears management; and\n    (b) recovery action; and\n    (c) foreclosure arrangements; and\n    (d) waiving debt after consulting the responsible Ministers; and\n    (e) writing off debt; and\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 27 Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020.\n\n  (2) Where an application for a small business drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 28 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 13 after the day on which this section commences.\n\n#### 29 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":15},{"sectionNumber":"12","sectionType":"section","heading":"Extra terms and conditions of small business drought loans","content":"#### 12 Extra terms and conditions of small business drought loans\n\n  The Corporation may determine the terms and conditions on which a small business drought loan is made.\n\n> Note: The loan needs to be subject to the terms and conditions mentioned in the definition of small business drought loan in section 4.","sortOrder":16},{"sectionNumber":"Division 5","sectionType":"division","heading":"Collecting and dealing with payments and enforcing security","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Small Business Drought Loans) Rules 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) Corporation;\n    (c) Desertification Convention;\n    (d) responsible Ministers.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> drought‑affected small business has the meaning given by section 5.\n\n> maximum loan amount, for a drought‑affected small business, means the lesser of the following:\n\n    (a) an amount that is equal to 50% of the existing commercial debt of the business;\n    (b) $500,000.\n\n> program means the Small Business Drought Loans Program prescribed by section 6.\n\n> small business drought loan means a loan by the Corporation to a drought‑affected small business, of not more than the maximum loan amount for the business, for the purpose of providing working capital for the business or refinancing existing commercial debt owed by the business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n#### 5 What is a drought‑affected small business?\n\n  (1) A business is a drought‑affected small business if all the requirements in this section are met in relation to the business.\n\n> Note: Extra conditions must be met for a loan to be made to the business under the Small Business Drought Loans program: see Division 3 of Part 2.\n\n  Substantial part of turnover from supplies to farm businesses\n  (2) A substantial part of the turnover of the business must be, or have been, from the business supplying, to farm businesses in affected areas, goods or services relating to primary production by those farm businesses.\n  Effect of drought on business\n  (3) As a consequence of drought affecting farm businesses in affected areas, there must have been:\n    (a) a material reduction in the turnover of the business; or\n    (b) a material increase in unsecured debts to the business by farm businesses.\n  Business has fewer than 20 employees\n  (4) The business must have fewer than 20 employees other than casual employees.\n  Business not a farm business\n  (5) The business must not be a farm business.\n\n## Part 2—Small Business Drought Loans Program\n\n### Division 1—Prescribing Small Business Drought Loans Program\n\n#### 6 Small Business Drought Loans Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Small Business Drought Loans Program.\n  (2) The Small Business Drought Loans Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for small business drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making small business drought loans in accordance with Division 3;\n    (iii) determining in accordance with Division 4 the terms and conditions on which small business drought loans are made;\n    (iv) taking security for small business drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to small business drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, small business drought loans, and if required, enforcing security taken for small business drought loans, in accordance with Division 5;\n    (vii) reviewing periodically small business drought loans and the terms and conditions on which they are made;\n    (viii) dealing with debts relating to small business drought loans in accordance with Division 6;\n    (ix) reporting to the responsible Ministers on small business drought loans in accordance with Division 7; and\n    (b) relates to small business drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the Desertification Convention.\n\n### Division 2—Dealing with applications for small business drought loans\n\n#### 8 Informing applicants of outcome of applications for small business drought loans\n\n  The Corporation must ensure that applicants for small business drought loans are informed of the outcomes of their loan applications as soon as practicable after decisions on their applications have been made.\n\n### Division 3—Making small business drought loans\n\n#### 9 Small business drought loans to be made only on application\n\n  The Corporation may make a small business drought loan to a drought‑affected small business only if the business makes an application for the loan that:\n    (a) is in writing; and\n    (b) includes the information (if any) required by the Corporation; and\n    (c) is accompanied by the documents (if any) required by the Corporation.\n\n#### 10 Capacity to repay loan and provide security\n\n  The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is assessed as having the capacity to repay the loan; and\n    (b) sufficient security for the loan is provided by the business.\n\n#### 11 Extra preconditions for making small business drought loans\n\n  (1) The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is in financial need of a concessional loan; and\n    (b) the business is assessed as financially viable, or as having sound prospects of a return to financial viability within 10 years; and\n    (c) the business owes commercial debt; and\n    (d) throughout the 6 months before the business applied for the loan, the business had fewer than 20 employees other than casual employees; and\n    (e) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than a public company (within the meaning of that Act), whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members); and\n    (f) the entity carrying on the business is registered for tax purposes in Australia with an Australian Business Number (ABN) and registered under the A New Tax System (Goods and Services Tax) Act 1999; and\n    (g) the entity carrying on the business is not subject to external administration or bankruptcy.\n\n> Note: The Board has the function of ensuring that the Corporation has procedures for review of decisions to make or refuse small business drought loans: see section 24.\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person whose principal business pursuit (in terms of the majority of the person’s own labour and income) is the drought‑affected small business.\n\n### Division 4—Determining terms and conditions of small business drought loans\n\n#### 12 Extra terms and conditions of small business drought loans\n\n  The Corporation may determine the terms and conditions on which a small business drought loan is made.\n\n> Note: The loan needs to be subject to the terms and conditions mentioned in the definition of small business drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 14 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of small business drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 15 Decisions on foreclosure to be made by Board\n\n  Any decision of the Corporation on foreclosure on a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to small business drought loans\n\n#### 16 Mediation\n\n  The Corporation must offer to undertake mediation relating to debts relating to small business drought loans and, if the offer is accepted, undertake the mediation.\n\n#### 17 Waiver\n\n  A decision of the Corporation to waive debt relating to a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board) after consulting the responsible Ministers and taking their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 18 Quarterly reporting\n\n  The Corporation must provide a report on small business drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of small business drought loans; and\n    (b) details of the portfolio of small business drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about small business drought loans to the responsible Ministers on request: see section 23.\n\n### Division 8—Funding of small business drought loans\n\n#### 19 Funding of small business drought loans\n\n  (1) The Corporation will be funded to make small business drought loans through an appropriation made by an Act.\n  (2) Funds for small business drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of small business drought loans; and\n    (b) only use funds provided for small business drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 20 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to the program.\n\n#### 21 Directions by responsible Ministers\n\n  For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program (other than directions that direct, or have the effect of directing, the Corporation in relation to a particular small business drought loan).\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 22 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about:\n    (i) the types of security the Corporation will consider and require for small business drought loans; and\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse small business drought loans and the process for requesting such reviews; and\n    (b) publishing the guidelines.\n\n#### 23 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about small business drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of small business drought loans.\n\n### Division 2—Board functions\n\n#### 24 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures, for reviewing decisions (the original decisions) to make or refuse small business drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 26 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops policies and procedures described in subsection (2), taking into account the following matters:\n    (i) the concessional nature of small business drought loans;\n    (ii) the effect on drought‑affected small businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures taking those matters into account.\n  (2) Subsection (1) applies to policies and procedures for managing small business drought loans in a prudential manner to minimise the risk of default, including policies and procedures for:\n    (a) arrears management; and\n    (b) recovery action; and\n    (c) foreclosure arrangements; and\n    (d) waiving debt after consulting the responsible Ministers; and\n    (e) writing off debt; and\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 27 Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020.\n\n  (2) Where an application for a small business drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 28 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 13 after the day on which this section commences.\n\n#### 29 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":17},{"sectionNumber":"14","sectionType":"section","heading":"Corporation to pay amounts collected to Commonwealth","content":"#### 14 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of small business drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).","sortOrder":18},{"sectionNumber":"15","sectionType":"section","heading":"Decisions on foreclosure to be made by Board","content":"#### 15 Decisions on foreclosure to be made by Board\n\n  Any decision of the Corporation on foreclosure on a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board).","sortOrder":19},{"sectionNumber":"Division 6","sectionType":"division","heading":"Dealing with debt relating to small business drought loans","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Small Business Drought Loans) Rules 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) Corporation;\n    (c) Desertification Convention;\n    (d) responsible Ministers.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> drought‑affected small business has the meaning given by section 5.\n\n> maximum loan amount, for a drought‑affected small business, means the lesser of the following:\n\n    (a) an amount that is equal to 50% of the existing commercial debt of the business;\n    (b) $500,000.\n\n> program means the Small Business Drought Loans Program prescribed by section 6.\n\n> small business drought loan means a loan by the Corporation to a drought‑affected small business, of not more than the maximum loan amount for the business, for the purpose of providing working capital for the business or refinancing existing commercial debt owed by the business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n#### 5 What is a drought‑affected small business?\n\n  (1) A business is a drought‑affected small business if all the requirements in this section are met in relation to the business.\n\n> Note: Extra conditions must be met for a loan to be made to the business under the Small Business Drought Loans program: see Division 3 of Part 2.\n\n  Substantial part of turnover from supplies to farm businesses\n  (2) A substantial part of the turnover of the business must be, or have been, from the business supplying, to farm businesses in affected areas, goods or services relating to primary production by those farm businesses.\n  Effect of drought on business\n  (3) As a consequence of drought affecting farm businesses in affected areas, there must have been:\n    (a) a material reduction in the turnover of the business; or\n    (b) a material increase in unsecured debts to the business by farm businesses.\n  Business has fewer than 20 employees\n  (4) The business must have fewer than 20 employees other than casual employees.\n  Business not a farm business\n  (5) The business must not be a farm business.\n\n## Part 2—Small Business Drought Loans Program\n\n### Division 1—Prescribing Small Business Drought Loans Program\n\n#### 6 Small Business Drought Loans Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Small Business Drought Loans Program.\n  (2) The Small Business Drought Loans Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for small business drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making small business drought loans in accordance with Division 3;\n    (iii) determining in accordance with Division 4 the terms and conditions on which small business drought loans are made;\n    (iv) taking security for small business drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to small business drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, small business drought loans, and if required, enforcing security taken for small business drought loans, in accordance with Division 5;\n    (vii) reviewing periodically small business drought loans and the terms and conditions on which they are made;\n    (viii) dealing with debts relating to small business drought loans in accordance with Division 6;\n    (ix) reporting to the responsible Ministers on small business drought loans in accordance with Division 7; and\n    (b) relates to small business drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the Desertification Convention.\n\n### Division 2—Dealing with applications for small business drought loans\n\n#### 8 Informing applicants of outcome of applications for small business drought loans\n\n  The Corporation must ensure that applicants for small business drought loans are informed of the outcomes of their loan applications as soon as practicable after decisions on their applications have been made.\n\n### Division 3—Making small business drought loans\n\n#### 9 Small business drought loans to be made only on application\n\n  The Corporation may make a small business drought loan to a drought‑affected small business only if the business makes an application for the loan that:\n    (a) is in writing; and\n    (b) includes the information (if any) required by the Corporation; and\n    (c) is accompanied by the documents (if any) required by the Corporation.\n\n#### 10 Capacity to repay loan and provide security\n\n  The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is assessed as having the capacity to repay the loan; and\n    (b) sufficient security for the loan is provided by the business.\n\n#### 11 Extra preconditions for making small business drought loans\n\n  (1) The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is in financial need of a concessional loan; and\n    (b) the business is assessed as financially viable, or as having sound prospects of a return to financial viability within 10 years; and\n    (c) the business owes commercial debt; and\n    (d) throughout the 6 months before the business applied for the loan, the business had fewer than 20 employees other than casual employees; and\n    (e) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than a public company (within the meaning of that Act), whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members); and\n    (f) the entity carrying on the business is registered for tax purposes in Australia with an Australian Business Number (ABN) and registered under the A New Tax System (Goods and Services Tax) Act 1999; and\n    (g) the entity carrying on the business is not subject to external administration or bankruptcy.\n\n> Note: The Board has the function of ensuring that the Corporation has procedures for review of decisions to make or refuse small business drought loans: see section 24.\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person whose principal business pursuit (in terms of the majority of the person’s own labour and income) is the drought‑affected small business.\n\n### Division 4—Determining terms and conditions of small business drought loans\n\n#### 12 Extra terms and conditions of small business drought loans\n\n  The Corporation may determine the terms and conditions on which a small business drought loan is made.\n\n> Note: The loan needs to be subject to the terms and conditions mentioned in the definition of small business drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 14 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of small business drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 15 Decisions on foreclosure to be made by Board\n\n  Any decision of the Corporation on foreclosure on a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to small business drought loans\n\n#### 16 Mediation\n\n  The Corporation must offer to undertake mediation relating to debts relating to small business drought loans and, if the offer is accepted, undertake the mediation.\n\n#### 17 Waiver\n\n  A decision of the Corporation to waive debt relating to a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board) after consulting the responsible Ministers and taking their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 18 Quarterly reporting\n\n  The Corporation must provide a report on small business drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of small business drought loans; and\n    (b) details of the portfolio of small business drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about small business drought loans to the responsible Ministers on request: see section 23.\n\n### Division 8—Funding of small business drought loans\n\n#### 19 Funding of small business drought loans\n\n  (1) The Corporation will be funded to make small business drought loans through an appropriation made by an Act.\n  (2) Funds for small business drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of small business drought loans; and\n    (b) only use funds provided for small business drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 20 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to the program.\n\n#### 21 Directions by responsible Ministers\n\n  For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program (other than directions that direct, or have the effect of directing, the Corporation in relation to a particular small business drought loan).\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 22 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about:\n    (i) the types of security the Corporation will consider and require for small business drought loans; and\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse small business drought loans and the process for requesting such reviews; and\n    (b) publishing the guidelines.\n\n#### 23 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about small business drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of small business drought loans.\n\n### Division 2—Board functions\n\n#### 24 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures, for reviewing decisions (the original decisions) to make or refuse small business drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 26 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops policies and procedures described in subsection (2), taking into account the following matters:\n    (i) the concessional nature of small business drought loans;\n    (ii) the effect on drought‑affected small businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures taking those matters into account.\n  (2) Subsection (1) applies to policies and procedures for managing small business drought loans in a prudential manner to minimise the risk of default, including policies and procedures for:\n    (a) arrears management; and\n    (b) recovery action; and\n    (c) foreclosure arrangements; and\n    (d) waiving debt after consulting the responsible Ministers; and\n    (e) writing off debt; and\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 27 Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020.\n\n  (2) Where an application for a small business drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 28 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 13 after the day on which this section commences.\n\n#### 29 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":20},{"sectionNumber":"16","sectionType":"section","heading":"Mediation","content":"#### 16 Mediation\n\n  The Corporation must offer to undertake mediation relating to debts relating to small business drought loans and, if the offer is accepted, undertake the mediation.","sortOrder":21},{"sectionNumber":"17","sectionType":"section","heading":"Waiver","content":"#### 17 Waiver\n\n  A decision of the Corporation to waive debt relating to a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board) after consulting the responsible Ministers and taking their views into account.","sortOrder":22},{"sectionNumber":"Division 7","sectionType":"division","heading":"Reporting to responsible Ministers","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Small Business Drought Loans) Rules 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) Corporation;\n    (c) Desertification Convention;\n    (d) responsible Ministers.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> drought‑affected small business has the meaning given by section 5.\n\n> maximum loan amount, for a drought‑affected small business, means the lesser of the following:\n\n    (a) an amount that is equal to 50% of the existing commercial debt of the business;\n    (b) $500,000.\n\n> program means the Small Business Drought Loans Program prescribed by section 6.\n\n> small business drought loan means a loan by the Corporation to a drought‑affected small business, of not more than the maximum loan amount for the business, for the purpose of providing working capital for the business or refinancing existing commercial debt owed by the business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n#### 5 What is a drought‑affected small business?\n\n  (1) A business is a drought‑affected small business if all the requirements in this section are met in relation to the business.\n\n> Note: Extra conditions must be met for a loan to be made to the business under the Small Business Drought Loans program: see Division 3 of Part 2.\n\n  Substantial part of turnover from supplies to farm businesses\n  (2) A substantial part of the turnover of the business must be, or have been, from the business supplying, to farm businesses in affected areas, goods or services relating to primary production by those farm businesses.\n  Effect of drought on business\n  (3) As a consequence of drought affecting farm businesses in affected areas, there must have been:\n    (a) a material reduction in the turnover of the business; or\n    (b) a material increase in unsecured debts to the business by farm businesses.\n  Business has fewer than 20 employees\n  (4) The business must have fewer than 20 employees other than casual employees.\n  Business not a farm business\n  (5) The business must not be a farm business.\n\n## Part 2—Small Business Drought Loans Program\n\n### Division 1—Prescribing Small Business Drought Loans Program\n\n#### 6 Small Business Drought Loans Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Small Business Drought Loans Program.\n  (2) The Small Business Drought Loans Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for small business drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making small business drought loans in accordance with Division 3;\n    (iii) determining in accordance with Division 4 the terms and conditions on which small business drought loans are made;\n    (iv) taking security for small business drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to small business drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, small business drought loans, and if required, enforcing security taken for small business drought loans, in accordance with Division 5;\n    (vii) reviewing periodically small business drought loans and the terms and conditions on which they are made;\n    (viii) dealing with debts relating to small business drought loans in accordance with Division 6;\n    (ix) reporting to the responsible Ministers on small business drought loans in accordance with Division 7; and\n    (b) relates to small business drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the Desertification Convention.\n\n### Division 2—Dealing with applications for small business drought loans\n\n#### 8 Informing applicants of outcome of applications for small business drought loans\n\n  The Corporation must ensure that applicants for small business drought loans are informed of the outcomes of their loan applications as soon as practicable after decisions on their applications have been made.\n\n### Division 3—Making small business drought loans\n\n#### 9 Small business drought loans to be made only on application\n\n  The Corporation may make a small business drought loan to a drought‑affected small business only if the business makes an application for the loan that:\n    (a) is in writing; and\n    (b) includes the information (if any) required by the Corporation; and\n    (c) is accompanied by the documents (if any) required by the Corporation.\n\n#### 10 Capacity to repay loan and provide security\n\n  The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is assessed as having the capacity to repay the loan; and\n    (b) sufficient security for the loan is provided by the business.\n\n#### 11 Extra preconditions for making small business drought loans\n\n  (1) The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is in financial need of a concessional loan; and\n    (b) the business is assessed as financially viable, or as having sound prospects of a return to financial viability within 10 years; and\n    (c) the business owes commercial debt; and\n    (d) throughout the 6 months before the business applied for the loan, the business had fewer than 20 employees other than casual employees; and\n    (e) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than a public company (within the meaning of that Act), whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members); and\n    (f) the entity carrying on the business is registered for tax purposes in Australia with an Australian Business Number (ABN) and registered under the A New Tax System (Goods and Services Tax) Act 1999; and\n    (g) the entity carrying on the business is not subject to external administration or bankruptcy.\n\n> Note: The Board has the function of ensuring that the Corporation has procedures for review of decisions to make or refuse small business drought loans: see section 24.\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person whose principal business pursuit (in terms of the majority of the person’s own labour and income) is the drought‑affected small business.\n\n### Division 4—Determining terms and conditions of small business drought loans\n\n#### 12 Extra terms and conditions of small business drought loans\n\n  The Corporation may determine the terms and conditions on which a small business drought loan is made.\n\n> Note: The loan needs to be subject to the terms and conditions mentioned in the definition of small business drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 14 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of small business drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 15 Decisions on foreclosure to be made by Board\n\n  Any decision of the Corporation on foreclosure on a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to small business drought loans\n\n#### 16 Mediation\n\n  The Corporation must offer to undertake mediation relating to debts relating to small business drought loans and, if the offer is accepted, undertake the mediation.\n\n#### 17 Waiver\n\n  A decision of the Corporation to waive debt relating to a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board) after consulting the responsible Ministers and taking their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 18 Quarterly reporting\n\n  The Corporation must provide a report on small business drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of small business drought loans; and\n    (b) details of the portfolio of small business drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about small business drought loans to the responsible Ministers on request: see section 23.\n\n### Division 8—Funding of small business drought loans\n\n#### 19 Funding of small business drought loans\n\n  (1) The Corporation will be funded to make small business drought loans through an appropriation made by an Act.\n  (2) Funds for small business drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of small business drought loans; and\n    (b) only use funds provided for small business drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 20 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to the program.\n\n#### 21 Directions by responsible Ministers\n\n  For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program (other than directions that direct, or have the effect of directing, the Corporation in relation to a particular small business drought loan).\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 22 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about:\n    (i) the types of security the Corporation will consider and require for small business drought loans; and\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse small business drought loans and the process for requesting such reviews; and\n    (b) publishing the guidelines.\n\n#### 23 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about small business drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of small business drought loans.\n\n### Division 2—Board functions\n\n#### 24 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures, for reviewing decisions (the original decisions) to make or refuse small business drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 26 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops policies and procedures described in subsection (2), taking into account the following matters:\n    (i) the concessional nature of small business drought loans;\n    (ii) the effect on drought‑affected small businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures taking those matters into account.\n  (2) Subsection (1) applies to policies and procedures for managing small business drought loans in a prudential manner to minimise the risk of default, including policies and procedures for:\n    (a) arrears management; and\n    (b) recovery action; and\n    (c) foreclosure arrangements; and\n    (d) waiving debt after consulting the responsible Ministers; and\n    (e) writing off debt; and\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 27 Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020.\n\n  (2) Where an application for a small business drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 28 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 13 after the day on which this section commences.\n\n#### 29 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":23},{"sectionNumber":"18","sectionType":"section","heading":"Quarterly reporting","content":"#### 18 Quarterly reporting\n\n  The Corporation must provide a report on small business drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of small business drought loans; and\n    (b) details of the portfolio of small business drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about small business drought loans to the responsible Ministers on request: see section 23.","sortOrder":24},{"sectionNumber":"Division 8","sectionType":"division","heading":"Funding of small business drought loans","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Small Business Drought Loans) Rules 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) Corporation;\n    (c) Desertification Convention;\n    (d) responsible Ministers.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> drought‑affected small business has the meaning given by section 5.\n\n> maximum loan amount, for a drought‑affected small business, means the lesser of the following:\n\n    (a) an amount that is equal to 50% of the existing commercial debt of the business;\n    (b) $500,000.\n\n> program means the Small Business Drought Loans Program prescribed by section 6.\n\n> small business drought loan means a loan by the Corporation to a drought‑affected small business, of not more than the maximum loan amount for the business, for the purpose of providing working capital for the business or refinancing existing commercial debt owed by the business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n#### 5 What is a drought‑affected small business?\n\n  (1) A business is a drought‑affected small business if all the requirements in this section are met in relation to the business.\n\n> Note: Extra conditions must be met for a loan to be made to the business under the Small Business Drought Loans program: see Division 3 of Part 2.\n\n  Substantial part of turnover from supplies to farm businesses\n  (2) A substantial part of the turnover of the business must be, or have been, from the business supplying, to farm businesses in affected areas, goods or services relating to primary production by those farm businesses.\n  Effect of drought on business\n  (3) As a consequence of drought affecting farm businesses in affected areas, there must have been:\n    (a) a material reduction in the turnover of the business; or\n    (b) a material increase in unsecured debts to the business by farm businesses.\n  Business has fewer than 20 employees\n  (4) The business must have fewer than 20 employees other than casual employees.\n  Business not a farm business\n  (5) The business must not be a farm business.\n\n## Part 2—Small Business Drought Loans Program\n\n### Division 1—Prescribing Small Business Drought Loans Program\n\n#### 6 Small Business Drought Loans Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Small Business Drought Loans Program.\n  (2) The Small Business Drought Loans Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for small business drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making small business drought loans in accordance with Division 3;\n    (iii) determining in accordance with Division 4 the terms and conditions on which small business drought loans are made;\n    (iv) taking security for small business drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to small business drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, small business drought loans, and if required, enforcing security taken for small business drought loans, in accordance with Division 5;\n    (vii) reviewing periodically small business drought loans and the terms and conditions on which they are made;\n    (viii) dealing with debts relating to small business drought loans in accordance with Division 6;\n    (ix) reporting to the responsible Ministers on small business drought loans in accordance with Division 7; and\n    (b) relates to small business drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the Desertification Convention.\n\n### Division 2—Dealing with applications for small business drought loans\n\n#### 8 Informing applicants of outcome of applications for small business drought loans\n\n  The Corporation must ensure that applicants for small business drought loans are informed of the outcomes of their loan applications as soon as practicable after decisions on their applications have been made.\n\n### Division 3—Making small business drought loans\n\n#### 9 Small business drought loans to be made only on application\n\n  The Corporation may make a small business drought loan to a drought‑affected small business only if the business makes an application for the loan that:\n    (a) is in writing; and\n    (b) includes the information (if any) required by the Corporation; and\n    (c) is accompanied by the documents (if any) required by the Corporation.\n\n#### 10 Capacity to repay loan and provide security\n\n  The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is assessed as having the capacity to repay the loan; and\n    (b) sufficient security for the loan is provided by the business.\n\n#### 11 Extra preconditions for making small business drought loans\n\n  (1) The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is in financial need of a concessional loan; and\n    (b) the business is assessed as financially viable, or as having sound prospects of a return to financial viability within 10 years; and\n    (c) the business owes commercial debt; and\n    (d) throughout the 6 months before the business applied for the loan, the business had fewer than 20 employees other than casual employees; and\n    (e) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than a public company (within the meaning of that Act), whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members); and\n    (f) the entity carrying on the business is registered for tax purposes in Australia with an Australian Business Number (ABN) and registered under the A New Tax System (Goods and Services Tax) Act 1999; and\n    (g) the entity carrying on the business is not subject to external administration or bankruptcy.\n\n> Note: The Board has the function of ensuring that the Corporation has procedures for review of decisions to make or refuse small business drought loans: see section 24.\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person whose principal business pursuit (in terms of the majority of the person’s own labour and income) is the drought‑affected small business.\n\n### Division 4—Determining terms and conditions of small business drought loans\n\n#### 12 Extra terms and conditions of small business drought loans\n\n  The Corporation may determine the terms and conditions on which a small business drought loan is made.\n\n> Note: The loan needs to be subject to the terms and conditions mentioned in the definition of small business drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 14 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of small business drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 15 Decisions on foreclosure to be made by Board\n\n  Any decision of the Corporation on foreclosure on a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to small business drought loans\n\n#### 16 Mediation\n\n  The Corporation must offer to undertake mediation relating to debts relating to small business drought loans and, if the offer is accepted, undertake the mediation.\n\n#### 17 Waiver\n\n  A decision of the Corporation to waive debt relating to a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board) after consulting the responsible Ministers and taking their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 18 Quarterly reporting\n\n  The Corporation must provide a report on small business drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of small business drought loans; and\n    (b) details of the portfolio of small business drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about small business drought loans to the responsible Ministers on request: see section 23.\n\n### Division 8—Funding of small business drought loans\n\n#### 19 Funding of small business drought loans\n\n  (1) The Corporation will be funded to make small business drought loans through an appropriation made by an Act.\n  (2) Funds for small business drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of small business drought loans; and\n    (b) only use funds provided for small business drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 20 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to the program.\n\n#### 21 Directions by responsible Ministers\n\n  For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program (other than directions that direct, or have the effect of directing, the Corporation in relation to a particular small business drought loan).\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 22 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about:\n    (i) the types of security the Corporation will consider and require for small business drought loans; and\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse small business drought loans and the process for requesting such reviews; and\n    (b) publishing the guidelines.\n\n#### 23 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about small business drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of small business drought loans.\n\n### Division 2—Board functions\n\n#### 24 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures, for reviewing decisions (the original decisions) to make or refuse small business drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 26 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops policies and procedures described in subsection (2), taking into account the following matters:\n    (i) the concessional nature of small business drought loans;\n    (ii) the effect on drought‑affected small businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures taking those matters into account.\n  (2) Subsection (1) applies to policies and procedures for managing small business drought loans in a prudential manner to minimise the risk of default, including policies and procedures for:\n    (a) arrears management; and\n    (b) recovery action; and\n    (c) foreclosure arrangements; and\n    (d) waiving debt after consulting the responsible Ministers; and\n    (e) writing off debt; and\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 27 Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020.\n\n  (2) Where an application for a small business drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 28 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 13 after the day on which this section commences.\n\n#### 29 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":25},{"sectionNumber":"19","sectionType":"section","heading":"Funding of small business drought loans","content":"#### 19 Funding of small business drought loans\n\n  (1) The Corporation will be funded to make small business drought loans through an appropriation made by an Act.\n  (2) Funds for small business drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of small business drought loans; and\n    (b) only use funds provided for small business drought loans for that purpose.","sortOrder":26},{"sectionNumber":"Division 9","sectionType":"division","heading":"Other matters relating to program","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Small Business Drought Loans) Rules 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) Corporation;\n    (c) Desertification Convention;\n    (d) responsible Ministers.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> drought‑affected small business has the meaning given by section 5.\n\n> maximum loan amount, for a drought‑affected small business, means the lesser of the following:\n\n    (a) an amount that is equal to 50% of the existing commercial debt of the business;\n    (b) $500,000.\n\n> program means the Small Business Drought Loans Program prescribed by section 6.\n\n> small business drought loan means a loan by the Corporation to a drought‑affected small business, of not more than the maximum loan amount for the business, for the purpose of providing working capital for the business or refinancing existing commercial debt owed by the business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n#### 5 What is a drought‑affected small business?\n\n  (1) A business is a drought‑affected small business if all the requirements in this section are met in relation to the business.\n\n> Note: Extra conditions must be met for a loan to be made to the business under the Small Business Drought Loans program: see Division 3 of Part 2.\n\n  Substantial part of turnover from supplies to farm businesses\n  (2) A substantial part of the turnover of the business must be, or have been, from the business supplying, to farm businesses in affected areas, goods or services relating to primary production by those farm businesses.\n  Effect of drought on business\n  (3) As a consequence of drought affecting farm businesses in affected areas, there must have been:\n    (a) a material reduction in the turnover of the business; or\n    (b) a material increase in unsecured debts to the business by farm businesses.\n  Business has fewer than 20 employees\n  (4) The business must have fewer than 20 employees other than casual employees.\n  Business not a farm business\n  (5) The business must not be a farm business.\n\n## Part 2—Small Business Drought Loans Program\n\n### Division 1—Prescribing Small Business Drought Loans Program\n\n#### 6 Small Business Drought Loans Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Small Business Drought Loans Program.\n  (2) The Small Business Drought Loans Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for small business drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making small business drought loans in accordance with Division 3;\n    (iii) determining in accordance with Division 4 the terms and conditions on which small business drought loans are made;\n    (iv) taking security for small business drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to small business drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, small business drought loans, and if required, enforcing security taken for small business drought loans, in accordance with Division 5;\n    (vii) reviewing periodically small business drought loans and the terms and conditions on which they are made;\n    (viii) dealing with debts relating to small business drought loans in accordance with Division 6;\n    (ix) reporting to the responsible Ministers on small business drought loans in accordance with Division 7; and\n    (b) relates to small business drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the Desertification Convention.\n\n### Division 2—Dealing with applications for small business drought loans\n\n#### 8 Informing applicants of outcome of applications for small business drought loans\n\n  The Corporation must ensure that applicants for small business drought loans are informed of the outcomes of their loan applications as soon as practicable after decisions on their applications have been made.\n\n### Division 3—Making small business drought loans\n\n#### 9 Small business drought loans to be made only on application\n\n  The Corporation may make a small business drought loan to a drought‑affected small business only if the business makes an application for the loan that:\n    (a) is in writing; and\n    (b) includes the information (if any) required by the Corporation; and\n    (c) is accompanied by the documents (if any) required by the Corporation.\n\n#### 10 Capacity to repay loan and provide security\n\n  The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is assessed as having the capacity to repay the loan; and\n    (b) sufficient security for the loan is provided by the business.\n\n#### 11 Extra preconditions for making small business drought loans\n\n  (1) The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is in financial need of a concessional loan; and\n    (b) the business is assessed as financially viable, or as having sound prospects of a return to financial viability within 10 years; and\n    (c) the business owes commercial debt; and\n    (d) throughout the 6 months before the business applied for the loan, the business had fewer than 20 employees other than casual employees; and\n    (e) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than a public company (within the meaning of that Act), whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members); and\n    (f) the entity carrying on the business is registered for tax purposes in Australia with an Australian Business Number (ABN) and registered under the A New Tax System (Goods and Services Tax) Act 1999; and\n    (g) the entity carrying on the business is not subject to external administration or bankruptcy.\n\n> Note: The Board has the function of ensuring that the Corporation has procedures for review of decisions to make or refuse small business drought loans: see section 24.\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person whose principal business pursuit (in terms of the majority of the person’s own labour and income) is the drought‑affected small business.\n\n### Division 4—Determining terms and conditions of small business drought loans\n\n#### 12 Extra terms and conditions of small business drought loans\n\n  The Corporation may determine the terms and conditions on which a small business drought loan is made.\n\n> Note: The loan needs to be subject to the terms and conditions mentioned in the definition of small business drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 14 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of small business drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 15 Decisions on foreclosure to be made by Board\n\n  Any decision of the Corporation on foreclosure on a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to small business drought loans\n\n#### 16 Mediation\n\n  The Corporation must offer to undertake mediation relating to debts relating to small business drought loans and, if the offer is accepted, undertake the mediation.\n\n#### 17 Waiver\n\n  A decision of the Corporation to waive debt relating to a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board) after consulting the responsible Ministers and taking their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 18 Quarterly reporting\n\n  The Corporation must provide a report on small business drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of small business drought loans; and\n    (b) details of the portfolio of small business drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about small business drought loans to the responsible Ministers on request: see section 23.\n\n### Division 8—Funding of small business drought loans\n\n#### 19 Funding of small business drought loans\n\n  (1) The Corporation will be funded to make small business drought loans through an appropriation made by an Act.\n  (2) Funds for small business drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of small business drought loans; and\n    (b) only use funds provided for small business drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 20 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to the program.\n\n#### 21 Directions by responsible Ministers\n\n  For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program (other than directions that direct, or have the effect of directing, the Corporation in relation to a particular small business drought loan).\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 22 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about:\n    (i) the types of security the Corporation will consider and require for small business drought loans; and\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse small business drought loans and the process for requesting such reviews; and\n    (b) publishing the guidelines.\n\n#### 23 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about small business drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of small business drought loans.\n\n### Division 2—Board functions\n\n#### 24 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures, for reviewing decisions (the original decisions) to make or refuse small business drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 26 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops policies and procedures described in subsection (2), taking into account the following matters:\n    (i) the concessional nature of small business drought loans;\n    (ii) the effect on drought‑affected small businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures taking those matters into account.\n  (2) Subsection (1) applies to policies and procedures for managing small business drought loans in a prudential manner to minimise the risk of default, including policies and procedures for:\n    (a) arrears management; and\n    (b) recovery action; and\n    (c) foreclosure arrangements; and\n    (d) waiving debt after consulting the responsible Ministers; and\n    (e) writing off debt; and\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 27 Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020.\n\n  (2) Where an application for a small business drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 28 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 13 after the day on which this section commences.\n\n#### 29 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":27},{"sectionNumber":"20","sectionType":"section","heading":"Charging of transaction costs","content":"#### 20 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to the program.","sortOrder":28},{"sectionNumber":"21","sectionType":"section","heading":"Directions by responsible Ministers","content":"#### 21 Directions by responsible Ministers\n\n  For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program (other than directions that direct, or have the effect of directing, the Corporation in relation to a particular small business drought loan).","sortOrder":29},{"sectionNumber":"Part 3","sectionType":"part","heading":"Other functions relating to program","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Small Business Drought Loans) Rules 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) Corporation;\n    (c) Desertification Convention;\n    (d) responsible Ministers.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> drought‑affected small business has the meaning given by section 5.\n\n> maximum loan amount, for a drought‑affected small business, means the lesser of the following:\n\n    (a) an amount that is equal to 50% of the existing commercial debt of the business;\n    (b) $500,000.\n\n> program means the Small Business Drought Loans Program prescribed by section 6.\n\n> small business drought loan means a loan by the Corporation to a drought‑affected small business, of not more than the maximum loan amount for the business, for the purpose of providing working capital for the business or refinancing existing commercial debt owed by the business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n#### 5 What is a drought‑affected small business?\n\n  (1) A business is a drought‑affected small business if all the requirements in this section are met in relation to the business.\n\n> Note: Extra conditions must be met for a loan to be made to the business under the Small Business Drought Loans program: see Division 3 of Part 2.\n\n  Substantial part of turnover from supplies to farm businesses\n  (2) A substantial part of the turnover of the business must be, or have been, from the business supplying, to farm businesses in affected areas, goods or services relating to primary production by those farm businesses.\n  Effect of drought on business\n  (3) As a consequence of drought affecting farm businesses in affected areas, there must have been:\n    (a) a material reduction in the turnover of the business; or\n    (b) a material increase in unsecured debts to the business by farm businesses.\n  Business has fewer than 20 employees\n  (4) The business must have fewer than 20 employees other than casual employees.\n  Business not a farm business\n  (5) The business must not be a farm business.\n\n## Part 2—Small Business Drought Loans Program\n\n### Division 1—Prescribing Small Business Drought Loans Program\n\n#### 6 Small Business Drought Loans Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Small Business Drought Loans Program.\n  (2) The Small Business Drought Loans Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for small business drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making small business drought loans in accordance with Division 3;\n    (iii) determining in accordance with Division 4 the terms and conditions on which small business drought loans are made;\n    (iv) taking security for small business drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to small business drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, small business drought loans, and if required, enforcing security taken for small business drought loans, in accordance with Division 5;\n    (vii) reviewing periodically small business drought loans and the terms and conditions on which they are made;\n    (viii) dealing with debts relating to small business drought loans in accordance with Division 6;\n    (ix) reporting to the responsible Ministers on small business drought loans in accordance with Division 7; and\n    (b) relates to small business drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the Desertification Convention.\n\n### Division 2—Dealing with applications for small business drought loans\n\n#### 8 Informing applicants of outcome of applications for small business drought loans\n\n  The Corporation must ensure that applicants for small business drought loans are informed of the outcomes of their loan applications as soon as practicable after decisions on their applications have been made.\n\n### Division 3—Making small business drought loans\n\n#### 9 Small business drought loans to be made only on application\n\n  The Corporation may make a small business drought loan to a drought‑affected small business only if the business makes an application for the loan that:\n    (a) is in writing; and\n    (b) includes the information (if any) required by the Corporation; and\n    (c) is accompanied by the documents (if any) required by the Corporation.\n\n#### 10 Capacity to repay loan and provide security\n\n  The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is assessed as having the capacity to repay the loan; and\n    (b) sufficient security for the loan is provided by the business.\n\n#### 11 Extra preconditions for making small business drought loans\n\n  (1) The Corporation must not make a small business drought loan to a drought‑affected small business unless:\n    (a) the business is in financial need of a concessional loan; and\n    (b) the business is assessed as financially viable, or as having sound prospects of a return to financial viability within 10 years; and\n    (c) the business owes commercial debt; and\n    (d) throughout the 6 months before the business applied for the loan, the business had fewer than 20 employees other than casual employees; and\n    (e) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than a public company (within the meaning of that Act), whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members); and\n    (f) the entity carrying on the business is registered for tax purposes in Australia with an Australian Business Number (ABN) and registered under the A New Tax System (Goods and Services Tax) Act 1999; and\n    (g) the entity carrying on the business is not subject to external administration or bankruptcy.\n\n> Note: The Board has the function of ensuring that the Corporation has procedures for review of decisions to make or refuse small business drought loans: see section 24.\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person whose principal business pursuit (in terms of the majority of the person’s own labour and income) is the drought‑affected small business.\n\n### Division 4—Determining terms and conditions of small business drought loans\n\n#### 12 Extra terms and conditions of small business drought loans\n\n  The Corporation may determine the terms and conditions on which a small business drought loan is made.\n\n> Note: The loan needs to be subject to the terms and conditions mentioned in the definition of small business drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 14 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of small business drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 15 Decisions on foreclosure to be made by Board\n\n  Any decision of the Corporation on foreclosure on a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to small business drought loans\n\n#### 16 Mediation\n\n  The Corporation must offer to undertake mediation relating to debts relating to small business drought loans and, if the offer is accepted, undertake the mediation.\n\n#### 17 Waiver\n\n  A decision of the Corporation to waive debt relating to a small business drought loan must be made by the Board (not a delegate of the Corporation or the Board) after consulting the responsible Ministers and taking their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 18 Quarterly reporting\n\n  The Corporation must provide a report on small business drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of small business drought loans; and\n    (b) details of the portfolio of small business drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about small business drought loans to the responsible Ministers on request: see section 23.\n\n### Division 8—Funding of small business drought loans\n\n#### 19 Funding of small business drought loans\n\n  (1) The Corporation will be funded to make small business drought loans through an appropriation made by an Act.\n  (2) Funds for small business drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of small business drought loans; and\n    (b) only use funds provided for small business drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 20 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to the program.\n\n#### 21 Directions by responsible Ministers\n\n  For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program (other than directions that direct, or have the effect of directing, the Corporation in relation to a particular small business drought loan).\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 22 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about:\n    (i) the types of security the Corporation will consider and require for small business drought loans; and\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse small business drought loans and the process for requesting such reviews; and\n    (b) publishing the guidelines.\n\n#### 23 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about small business drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of small business drought loans.\n\n### Division 2—Board functions\n\n#### 24 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures, for reviewing decisions (the original decisions) to make or refuse small business drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 26 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops policies and procedures described in subsection (2), taking into account the following matters:\n    (i) the concessional nature of small business drought loans;\n    (ii) the effect on drought‑affected small businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures taking those matters into account.\n  (2) Subsection (1) applies to policies and procedures for managing small business drought loans in a prudential manner to minimise the risk of default, including policies and procedures for:\n    (a) arrears management; and\n    (b) recovery action; and\n    (c) foreclosure arrangements; and\n    (d) waiving debt after consulting the responsible Ministers; and\n    (e) writing off debt; and\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 27 Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020.\n\n  (2) Where an application for a small business drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 28 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 13 after the day on which this section commences.\n\n#### 29 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":30},{"sectionNumber":"22","sectionType":"section","heading":"Preparing and publishing guidelines relating to program","content":"#### 22 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about:\n    (i) the types of security the Corporation will consider and require for small business drought loans; and\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse small business drought loans and the process for requesting such reviews; and\n    (b) publishing the guidelines.","sortOrder":32},{"sectionNumber":"23","sectionType":"section","heading":"Providing information and advice to responsible Ministers","content":"#### 23 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about small business drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of small business drought loans.","sortOrder":33},{"sectionNumber":"24","sectionType":"section","heading":"Ensuring internal review of decisions about loans","content":"#### 24 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures, for reviewing decisions (the original decisions) to make or refuse small business drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.","sortOrder":35},{"sectionNumber":"26","sectionType":"section","heading":"Developing and applying loan management policies and procedures","content":"#### 26 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops policies and procedures described in subsection (2), taking into account the following matters:\n    (i) the concessional nature of small business drought loans;\n    (ii) the effect on drought‑affected small businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures taking those matters into account.\n  (2) Subsection (1) applies to policies and procedures for managing small business drought loans in a prudential manner to minimise the risk of default, including policies and procedures for:\n    (a) arrears management; and\n    (b) recovery action; and\n    (c) foreclosure arrangements; and\n    (d) waiving debt after consulting the responsible Ministers; and\n    (e) writing off debt; and\n    (f) handling disputes and complaints.","sortOrder":36},{"sectionNumber":"Part 4","sectionType":"part","heading":"Transitional, application and savings provisions","content":"## Part 4—Transitional, application and savings provisions","sortOrder":37},{"sectionNumber":"27","sectionType":"section","heading":"Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020—transitional and application provisions","content":"#### 27 Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans)(Cessation of Interest‑Free Period) Amendment Instrument 2020.\n\n  (2) Where an application for a small business drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.","sortOrder":38},{"sectionNumber":"28","sectionType":"section","heading":"Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision","content":"#### 28 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 13 after the day on which this section commences.","sortOrder":39},{"sectionNumber":"29","sectionType":"section","heading":"Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision","content":"#### 29 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":40}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. Configure AI_GATEWAY_API_KEY or use a provider module. Learn more: https://ai-sdk.dev/unauthenticated-ai-gateway","source":"analysis-cron"},"kimi_summary":{"_metrics":{"completionTokens":599},"content_quality":"ok","complexity_score":6,"scope_assessment":{"changed":false,"description":"The legislation remains focused on its original purpose of providing concessional loans to drought-affected small businesses that supply farm businesses. While subsequent amendments have modified interest rate provisions and transitional arrangements, the core scope has not expanded beyond this targeted assistance program."},"complexity_factors":["Multiple nested eligibility conditions in section 11 (7 separate preconditions with sub-conditions for business structures)","Cross-references to external legislation including Corporations Act 2001, A New Tax System (Goods and Services Tax) Act 1999, and Desertification Convention","Defined terms rely on parent Act (Regional Investment Corporation Act 2018) and international treaty definitions","Transitional provisions referencing three separate amendment instruments with staggered application dates","Board-level decision-making requirements for foreclosure and debt waiver create procedural layering","Conditional logic in section 5 requiring ALL requirements to be met (conjunctive test) with materiality thresholds"],"plain_english_summary":"A government-backed Small Business Drought Loans Program, run by the Regional Investment Corporation, offers concessional loans up to $500,000 (10 years, interest-only first 5) to non-farm small businesses that supply drought-affected farmers and have suffered financially.  \n\nWith borrower protections like required mediation, board-level foreclosure/waiver decisions, and penalty-free early repayment, the scheme aims to sustain rural supply chains and keep local economies functioning through drought."},"flash_summary":{"complexity_score":5,"scope_assessment":{"changed":false,"description":"The instrument, as presented, stays within the original program purpose: to provide concessional loans to small businesses affected by drought through their links to drought‑affected farm businesses. The listed amendments and transitional provisions (cessation of an interest‑free period and later interest‑rate amendment instruments) adjust operational features (interest timing/setting and temporal application) rather than expand the program’s target population, its basic loan design (term, interest‑only period), or the core governance architecture. In short, the changes appear to be operational and procedural refinements (interest rate mechanics and transitional application rules) rather than an expansion of the program’s substantive scope."},"complexity_factors":["Multiple cross‑references to the Regional Investment Corporation Act 2018 and to Operating Mandate/interest‑rate instruments (creates external dependencies)","A moderate number of defined terms in the instrument (Act, affected area, commercial debt, drought‑affected small business, maximum loan amount, program, small business drought loan) (section 4)","Several multi‑part eligibility and precondition rules with nested subclauses (notably section 11 with parts (a)‑(g) and subsections (2)‑(3))","Qualitative tests that create administrative discretion: 'substantial part of turnover', 'material reduction', 'material increase' (section 5)","Governance constraints reserving specific decisions to the Board (foreclosure, waiver) and requiring ministerial consultation for waivers (sections 15, 17), increasing decision points","Transitional and temporal application rules referencing multiple amendment instruments across years (sections 27–29), adding temporal complexity","Repeating structural divisions and mirrored provisions across Parts/Divisions in the instrument (makes navigation and reading more cumbersome though not substantively adding law)"],"plain_english_summary":"**What this instrument does (mechanics)\n\n- Prescribes and sets out how the Regional Investment Corporation (the Corporation) will run the Small Business Drought Loans Program (the program). (See sections 6, 12.)\n- Defines eligibility, loan design and program administration rules (see sections 4–5, 9–11, 12, 14–19). Key mechanical features: the loan term is 10 years; the first 5 years are interest‑only and the final 5 years require interest and principal repayments; early repayment of principal is allowed without penalty (section 4 definition of \"small business drought loan\").\n- Caps loan size at the lesser of 50% of a business's existing commercial debt or $500,000 (section 4 \"maximum loan amount\").\n- Requires applications to be in writing, include whatever information and documents the Corporation requires, and be assessed for capacity to repay and for adequate security before any loan is made (sections 9–10).\n- Adds further preconditions for a loan: the business must be in financial need of a concessional loan, be assessed as viable (or likely viable within 10 years), owe commercial debt, have fewer than 20 non‑casual employees in the 6 months before applying, be carried on by persons who meet citizenship/residence and principal‑pursuit tests, be tax‑registered in Australia (ABN and GST), and not be in external administration or bankruptcy (section 11).\n- Requires the Corporation to take security, to charge borrowers for transaction costs it incurs (section 6(2)(a)(iv)–(v)), and to remit repayments (principal and interest) to the Commonwealth as soon as reasonably practicable (section 14). Transaction cost amounts are retained by the Corporation.\n- Provides processes for debt handling: the Corporation must offer mediation for loan‑related debts (section 16); foreclosure decisions and debt waiver decisions must be made by the Board (not by delegates) and waivers must be made after consulting the responsible Ministers (sections 15, 17).\n- Requires quarterly reporting to the responsible Ministers on uptake, portfolio details and financial performance (section 18) and allows Ministers to give written directions about the program (but not about particular individual loans) (section 21).\n- Sets funding mechanics: loans are to be funded from an appropriation under an Act and the Corporation must only request and use funds as required to advance loans (section 19).\n- Contains transitional and application clauses covering prior applications and later interest‑rate instruments (sections 27–29).\n- States the constitutional basis of the program to be the external affairs power (paragraph 51(xxix)) insofar as the program implements Australia’s obligations under the Desertification Convention (section 7).\n\nWho is affected\n\n- Primary beneficiaries: non‑farm small businesses (fewer than 20 non‑casual employees) whose turnover substantially derives from supplying goods or services to farm businesses in areas recognised under the Desertification Convention and that have been materially affected by drought (section 5). These businesses must owe commercial debt and meet the additional preconditions in section 11.\n- The Commonwealth government: funds the loans (section 19) and receives loan repayments (section 14).\n- The Corporation and its Board: given the operational responsibility to assess applications, set detailed loan terms (subject to the mandatory features in section 4), take security, manage arrears/recovery, run mediation, and report to Ministers (sections 6, 12, 14–18, 22, 24, 26).\n- Private commercial creditors: the program explicitly permits refinancing of existing commercial debt (definition of small business drought loan), so existing lenders may see refinancing of their loans by the program.\n\nWhy it matters (claimed purpose and practical trade‑offs)\n\n- The instrument explicitly prescribes this program as part of implementing Australia’s international obligations under the Desertification Convention (section 7). That is the stated constitutional and policy basis.\n- Practical effect: it creates a targeted concessional loan facility for small businesses harmed indirectly by drought (businesses that supply drought‑affected farms), allowing working capital support or refinancing of existing commercial debt (section 4). The concessional structure (interest‑only initial period, capped amounts, government funding) changes the financing options available to eligible firms.\n\nTesting the stated purpose against costs, incentives and trade‑offs\n\n- Who pays: the Commonwealth via appropriation funds the loan advances (section 19) and receives repayments back (section 14). There is a fiscal cost and contingent fiscal risk while loans are outstanding.\n- Benefits concentrated, costs diffuse: the direct financial benefit is concentrated to qualifying small businesses (section 5 and 11). Fiscal costs and prudential risks are borne by the Commonwealth (section 19), and reputational/administrative costs by the Corporation and its Board.\n- Incentives and substitution: the program permits refinancing of commercial debt (definition of small business drought loan). That creates an incentive for eligible businesses to substitute government concessional credit for private commercial borrowing; the instrument requires evidence of commercial debt and financial need (section 11), and capacity to repay and adequate security must be assessed (section 10), which are intended to limit inappropriate substitution.\n- Prudential trade‑offs: the instrument requires the Board to develop prudential loan‑management policies (section 26) and reserves discretionary high‑impact decisions (foreclosure, waivers) to the Board (sections 15, 17). Those safeguards allocate decision power to the Board but leave material discretion about terms, acceptable security and waivers.\n- Compliance and implementation burden: applicants must produce writing, documents and information requested by the Corporation (section 9); the Corporation must publish guidelines (section 22). Several qualitative eligibility tests (\"substantial part of turnover\", \"material reduction\", \"material increase\") will require case‑by‑case assessments that create administrative discretion and potential variability in outcomes (section 5).\n- Governance and ministerial oversight: Ministers can give written directions about the program generally (section 21) and must be consulted before waiving debt (section 17). The Board must report quarterly (section 18) and publish guidelines (section 22), embedding reporting and oversight layers.\n\nImmediate implementation risks and open points\n\n- Interest rates are set by separate instruments (Regional Investment Corporation Operating Mandate Direction 2018 and later interest rate amendment instruments referenced in sections 4 note and 28–29), so the effective concessionality depends on those instruments.\n- Several eligibility terms are qualitative and will rely on the Corporation’s guidelines and exercise of judgment (sections 5, 11, 22). Clear published guidelines will be necessary to limit inconsistent application (section 22)."}},"importantCases":[],"_links":{"self":"/api/acts/regional-investment-corporation-small-business-drought-loans-rules-2020","history":"/api/acts/regional-investment-corporation-small-business-drought-loans-rules-2020/history","analysis":"/api/acts/regional-investment-corporation-small-business-drought-loans-rules-2020/analysis","conflicts":"/api/acts/regional-investment-corporation-small-business-drought-loans-rules-2020/conflicts","importantCases":"/api/acts/regional-investment-corporation-small-business-drought-loans-rules-2020/important-cases","documents":"/api/acts/regional-investment-corporation-small-business-drought-loans-rules-2020/documents"}}