Regional Investment Corporation (Agristarter Loans) Rule 2019
10Terms of agristarter loans
Start here
Get a plain-English read of 10
Turn the raw legal text into a practical explanation grounded in Regional Investment Corporation (Agristarter Loans) Rule 2019.
10 Terms of agristarter loans
(1) Subject to subsections (2) and (3), the Corporation may set the terms and conditions upon which an agristarter loan is made. Offering agristarter loans (2) The maximum amount of an agristarter loan is the lesser of: (a) the amount that would result in the recipient having 50 per cent of its total debt in Commonwealth funded concessional loans; or (b) $2 million. (3) The Corporation has discretion to set the terms and conditions upon which an agristarter loan is made, provided that the agristarter loan: (aa) is, pursuant to its terms, to be applied: (i) in the case of a succession loan—to support succession arrangements in respect of a farm business that is or will be an eligible farm business; and (ii) in the case of a first farmer loan—to support the purchase, establishment or development of a farm business that is or will be an eligible farm business; and (a) has an initial loan term of ten years; and (b) has an initial interest‑only period of five years; and (d) allows full or partial early repayment (of principal, interest or both, at the recipient’s discretion) at any time without penalty; and (e) is backed by sufficient security.
Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.
Types of security the Corporation must consider (5) For the purposes of paragraph (3)(e)—the Corporation must consider requiring security, including in the form of: (a) a registered mortgage over land; or (b) a registered mortgage over livestock; or (c) a registered security interest in water rights. Meaning of total debt (6) For the purposes of paragraph (2)(a)—total debt means the total debt owed by the recipient in respect of the farm business, including: (a) debt established on commercial terms, at commercial interest rates; and (b) debt established under Commonwealth funded concessional loans, but excluding debts which are not in respect of the farm business, such as personal, credit card and home loan debts.