8Grant of a succession loan

8 Grant of a succession loan

Eligibility requirements—succession loans (1) Subject to subsection (2), the Corporation may grant a loan to a farm business, a farm business successor or a farm asset successor (recipient) where the Corporation is satisfied that: (a) the farm business is undertaking or has undertaken succession planning; and (ab) the loan is to support succession arrangements; and (b) the recipient has obtained or will obtain within a reasonable period a loan on commercial terms; and (c) the recipient is in financial need of a concessional loan; and (d) the recipient has the capacity to repay the loan; and (e) in respect of a loan to support farm business succession, after the succession arrangements are carried out: (i) at least one member of the farm business has experience operating a farm business or a demonstrated potential to operate a farm business; and (ii) at least one member of the farm business intends to have the farm business as their principal business pursuit; and (iii) the business will be an eligible farm business; and (f) in respect of a loan to support farm asset succession, after the succession arrangements are carried out, the farm business in which the farm asset successor holds the sole or a controlling interest: (i) will have at least one member who has experience operating a farm business or a demonstrated potential to operate a farm business; and (ii) will have at least one member who intends to have the farm business as their principal business pursuit; and (iii) will be an eligible farm business; and (g) in respect of succession loans provided directly to a farm business, at least one member of the farm business has the farm business as their principal business pursuit. When a succession loan must not be granted (2) The Corporation must not grant a loan under subsection (1) unless: (a) it is satisfied of the matters set out in subsection (1); and (b) the loan is made: (i) to support farm business succession in respect of a farm business that is engaged solely or mainly in producing commodities for constitutional trade or commerce; or (ia) to support farm asset succession in respect of a farm business in which a farm asset successor holds the sole or a controlling interest, and that is engaged solely or mainly in producing commodities for constitutional trade or commerce; or (ii) for the purpose of encouraging or promoting constitutional trade or commerce.