11Extra preconditions for making small business drought loans

11 Extra preconditions for making small business drought loans

(1) The Corporation must not make a small business drought loan to a drought‑affected small business unless: (a) the business is in financial need of a concessional loan; and (b) the business is assessed as financially viable, or as having sound prospects of a return to financial viability within 10 years; and (c) the business owes commercial debt; and (d) throughout the 6 months before the business applied for the loan, the business had fewer than 20 employees other than casual employees; and (e) the business is carried on by: (i) a sole trader covered by subsections (2) and (3); or (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 (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 (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 (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 (g) the entity carrying on the business is not subject to external administration or bankruptcy.

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.

(2) This subsection covers a person who is an Australian citizen or permanent resident. (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.