Drought Recovery Concessional Loans
The Drought Recovery Concessional Loans Scheme aims to assist drought affected Farm Businesses that are in need of financial assistance. This scheme recognises parts of Australia are experiencing unprecedented drought conditions, the financial impacts of which are beyond the ability of some, otherwise viable, Farm Businesses to manage and recover from.
The Drought Recovery Concessional Loans Scheme forms part of the Australian Government's response to drought and is designed to help Farm Businesses recover from the effects of drought and return to commercial viability in the longer term.
Under the scheme, the Australian Government has provided New South Wales with $50 million for the provision of Drought Recovery Concessional Loans in 2014–15, and is making $25 million available over 2015–16. Funding for 2015–16 may be increased, subject to demand and at the discretion of the Australian Government.
Applications for the Drought Recovery Concessional Loans Scheme will close when funding is fully committed or on 30 June 2016 (whichever occurs first).
The loans are for Planting and/or Restocking drought recovery activities (as seasonal conditions allow) and associated expenses.
Loans up to $1 million, repayable over 10 years at a variable concessional interest rate are available.
A Drought Recovery Concessional Loan may also be used to refinance in full or in part the Operating Expenses and/or Drought Recovery and Preparedness Activities component of an existing Drought Concessional Loan.
- loans are for eligible farm businesses for the purposes of planting and restocking
- loan amounts will be up to 50 per cent of total eligible debt to a maximum of $1 million
- a variable concessional interest rate, currently 2.71 per cent (from 1 August 2015)
- maximum ten year loans available with interest only payments for up to five years
- refinance or repayment required by the end of the loan term
- the combined maximum loan amount available under the Drought Recovery Concessional Loans Scheme, Farm Finance Concessional Loans Scheme and Drought Concessional Loans Scheme will be up to 50 per cent of total eligible debt to a maximum of $2 million in total. Within this, the amount for the Drought Recovery Concessional Loan component cannot exceed $1 million
- applications will close when funding is fully committed or by 30 June 2016.
To be eligible for a Drought Recovery Concessional Loan you and your farm business must:
- be commercially viable in the long term; and
- be experiencing a significant financial impact, causing a financial need for assistance; and
- have experienced 1 in 50 year (or worse) drought conditions OR can demonstrate that you have experienced a significant financial impact as a direct result of drought over at least a three year period; and
- have taken reasonable steps to prepare for the effects of drought, including the provision of an acceptable drought management plan OR can demonstrate that you have undertaken drought management activities identified in a drought management plan to prepare for the effects of drought; and
- have seasonal conditions that allow for eligible planting and/or restocking activities to commence; and
- have the capacity to repay the loan; and
- have the ability to provide sufficient security against the loan; and
- have the support of your current commercial lender(s) if a Drought Recovery Concessional Loan is approved.
Detailed eligibility criteria for the Drought Recovery Concessional Loans Scheme is available in the Scheme Guidelines.
A Drought Management Plan is to be completed and is to be provided to NSW RAA as part of your application.
Bureau of Meteorology Rainfall Deficiency Report
Applicants must submit a valid Bureau of Meteorology Rainfall Deficiency Report as part of their application.
This report identifies those areas that have experienced one of the following rainfall deficiencies, which extend 12 months or more (the 12 month period needs to be continuous, in whole months (i.e. not part of a month) and wholly within the last two years):
- A rainfall deficiency equivalent to or worse than, a 1-in-50 year rainfall event; or
- A rainfall deficiency equivalent to or worse than, a 1-in-100 year rainfall event.
If your farm business is not located in either of the above rainfall deficient areas you may still be eligible for assistance under the Drought Recovery Concessional Loans Scheme. In this case, you must demonstrate:
- that your farm business has experienced Significant Financial Impact as a direct result of drought over at least a three year period (which can include the forthcoming season); and
- that you have undertaken Drought Management Activities identified in an acceptable Drought Management Plan for at least a three year period (which can include the forthcoming season) to prepare your farm business for the effects of drought.
Obtaining a Rainfall Deficiency Report
A report can be obtained using the Bureau of Meteorology - Australian Rainfall Deficiency Analyser.
To locate your farm business on the Bureau of Meteorology map simply click on the above Australian Rainfall Deficiency Analyser web link and use the "+" or "-" buttons to zoom in or out to locate your property on the map. To ensure the greatest accuracy in obtaining a valid Rainfall Deficiency Report please continue to utilise the zoom function until your property is positively identified. To avoid inadvertently selecting a neighbouring property make sure your selection is well within your property boundaries.
Alternately to using the "+" or "-"buttons to locate your farm business on the map you can enter individual latitude and longitude co-ordinates to generate a report. (link: How to obtain Latitude and Longitude).
Once you have accurately located your farm business, simply click your mouse and an option to download a Rainfall Deficiency Report becomes available. Click "download report", and then print the Rainfall Deficiency Report and attached it to your loan application.
Your Rainfall Deficiency Report will be valid for a period of 60 days and forms part of your loan application. If you are unable to lodge your application within the 60 day period you will need to obtain a new report.
It is important to note that the Bureau of Meteorology updates the rainfall deficiency data used for the summary maps and reports on the 23rd of each month (or next business day). These updates may affect which areas have experienced eligible rainfall deficiencies within the previous 24 months. This may in turn affect the eligibility of your farm business for a Drought Recovery Concessional Loan.
When assessing applications, NSW RAA will verify information provided by applicants.
- Scheme Guidelines 320.6 KB
- Frequently Asked Questions 47.6 KB
- Application 122.5 KB
- Application 859.0 KB
- Lenders Certificate of Support 25.8 KB
- Drought Management Plan 79.7 KB
- Drought Management Plan 236.5 KB
- Seasonal Conditions Report 23.7 KB
- Seasonal Conditions Report 82.5 KB
- How to obtain Longitude and Latitude 7.1 KB
This program is funded by the Australian Government and delivered by the NSW Rural Assistance Authority.