Frequently asked questions
The below FAQs specifically relate to the Natural Disaster Relief Loan for small business operators.
What is the Natural Disaster Relief Loan?
The Natural Disaster Relief Loan is designed to support small businesses operators impacted by a natural disaster, by providing a concessional interest rate loan that can be used as essential working capital to continue business operations or to repair or replace damaged property. This type of loan is offered to primary producers, small business operators and non-profit organisations.
Who can apply for the Natural Disaster Relief Loan?
To be eligible, the small business operator must have been impacted by a declared natural disaster event and operate the business within a local government area that has been declared. Small businesses must also:
- have fewer than 20 full-time (or equivalent) employees
- be a registered business, partnership or sole trader enterprise
- hold an active Australian Business Number (ABN) that was also current at the time of the event
- earn the majority of income from the small business
- have assets that have been significantly damaged as a direct result of the declared natural disaster
- have assets located in the defined natural disaster area for the event that have suffered direct damage as a result of the declared natural disaster event
- have suffered a significant loss of income as a result of direct damage from the declared natural disaster
- intend to re-establish or continue the small business within the same location or within the same local government area (LGA).
How do I apply for the loan?
Applications for the Natural Disaster Relief Loan must be submitted online via our website.
How long do I have to apply?
Applications are open for six months from the date of the natural disaster declaration. Refer to the Declarations page of the RAA website for closure dates.
How much can I apply for and how long do I have to repay the loan?
A loan of up to $130,000 is available. The maximum loan term is 12 years, which includes a two-year interest and repayment free period and 10 years of principle and interest repayments.
What information do I need to provide with my application?
When you submit an application for a Natural Disaster Relief Loan, you will need to provide copies of the following documents:
- Signed Consent to Contact Lenders Form (if applicable)
- Last 3 years’ balance sheets and financial statements of the applying small business (these include profit and loss statements, trading account and depreciation schedules)
- Last 3 years’ individual taxation returns of all members of the small business and a current listing of all assets and liabilities held by each individual director, shareholder, partner or trustee of the small business
- Last 3 years' of tax returns and financial statements for all related business entities that individual members of the small business are involved in, if applicable
- Trust deed (if applicable)
- Monthly cash flow budget for the next 12 months
- Current LGA (council) rates and LLS rates notice(s) for property(s) where the damage occurred and the work is to be completed (if the affected property is leased, a lease covering the property at the time of the declared natural disaster outlining the tenant’s responsibilities is required)
- Current LGA (council) rates for the property being offered as security, if different from above
- Proof of the small business’ address
- Confirmation of bank details, such as the front page of a bank statement showing the account name, BSB and account number.
You can download a Consent to Contact Lenders Form template and a Cash Flow Statement template from our Forms and Downloads page, if required.
Does a mortgage get taken over my property?
Yes. Loans are secured by a registered mortgage over land and not necessarily a first mortgage. A Deed of Priority will be required if you have an existing mortgage on the property, any existing RAA loans may also be included in a deed of priority. Additional or alternate property may be considered.
You will need to provide a signed Consent to Contact Lenders Form with your application, listing your lender/s details and giving the RAA authorisation to contact the lenders to arrange priority requirements.
As part of the assessment process, the RAA will obtain title searches to confirm ownership of the land offered as security. The cost of the searches is charged to the applicant, whether or not they take up the loan.
Do my existing lender(s) need to sign any forms?
No, not with the initial application. A signed Consent to Contact Lenders Form is required. We encourage you to inform your lender(s) about your application. The RAA will contact your lender(s) if your application progresses to negotiate priority arrangements. Existing RAA loans may also be included in any priority arrangements with your lender(s).
Can I get an unsecured loan if I do not have security to offer?
No. As per the program guidelines acceptable security must be provided.
If I or a related entity receives income from outside Australia, will it be included in the RAA’s eligibility assessment?
Yes. All foreign income, regardless of its source, type, or origin, will be included in the assessment and classified as non-primary production income.
What can the loan be used for?
The Natural Disaster Relief Loan can be used for the following:
- Essential working capital for up to 12 months from the date of the disaster, to continue business operations until normal income resumes or until the next major income is received
- Replacement and/or repair of property damaged as a result of a disaster and associated improvements not covered by insurance.
What are the key steps in the loan assessment process?
- Step 1 – Pre Assessment:
The RAA will conduct a preliminary review of your application to determine if all required documentation has been provided. - Step 2 – Initial Assessment:
The RAA will conduct an assessment to ensure the eligibility requirements are met and determine your borrowing capacity. - Step 3 – Final Assessment:
The RAA will contact your lender(s) (if applicable) and arrange priority requirements for the loan. The priority arrangements may also include any existing RAA loan balances. - Step 4 – Conditional approval:
You will be advised of conditional approval, and will be required to pay fees applicable to your loan application, for example, security searches and registration costs. Loan documentation and a Deed of Priority is prepared once payment is received. - Step 5 – Loan documentation:
Loan and security documents will be sent for signing. Your bank will receive the Deed of Priority to sign and accept the arrangements agreed to in Step 3. - Step 6 – Loan settlement:
Once all signed documentation is returned from all parties the security will be registered. You will then be advised the loan is ready to draw. - Step 7 – Loan drawdown:
Valid tax invoices are to be lodged via the RAA claim process outlined in our email upon loan settlement.
What is the difference between direct and indirect damage?
Direct damage refers to physical damage that occurs as a direct result of the declared natural disaster. It does not include damage caused during clean-up or recovery efforts. For example, a boat damaged during the flood or while floodwaters were still present would be considered direct damage. However, if the boat was damaged during post-flood clean-up, it would not be covered.
Indirect damage refers to financial or operational losses that occur as a consequence of the disaster, rather than from the event itself. For example, a loss of income due to power outages, spoiled stock, or reduced customer traffic caused by road closures.
Can I apply to cover loss of income?
No. The loan can be used for working capital for up to 12 months to continue business operations, however the business must have suffered direct damage to assets from the declared natural disaster.
Can I apply if I did not have direct damage but lost power for a prolonged period because of the natural disaster?
No, you must have damage to assets as a direct result of the declared natural disaster.
How do I access the funds once approved?
Once all legal requirements have been completed, the RAA will fully draw down the loan and deposit it directly to the nominated bank account.
What is the interest rate and can my interest rate change?
A concessional interest rate is applied to Natural Disaster Relief Loans. The rate applicable at the time of loan commencement is published on the program webpage. The interest rate applied to the loan is fixed for the term of the loan.
How does the RAA protect itself against fraud?
The RAA has a strong commitment to fraud prevention, detection, and response. Making a fraudulent application, including providing false or misleading information is a criminal offence which carries a maximum penalty of two years imprisonment, or a fine of $22,000, or both.
The RAA will also attempt to recover any assistance received as a result of fraud. More information can be found on our Fraud and Corruption page.
Who can help with my application?
If you have any questions about this program you can contact our team by calling 1800 678 593 or emailing rural.assist@raa.nsw.gov.au.
If you have difficulty understanding the guidelines or completing the application form you should seek the assistance of your rural/financial counsellor, business advisor, accountant or a trusted family member/friend. If you need assistance with interpreting or translating, please contact Multicultural NSW on 1300 651 500 or email languageservices@multicultural.nsw.gov.au.