Loans to cooperatives engaged in processing and storing primary product

Provides loans to eligible South Australian cooperatives engaged in processing and storing primary product, and enables cooperatives to claim Commonwealth taxation benefits (interest, depreciation and principal repayments) where the loan is provided by a government source.

Loans have a maximum term of 10 years and are charged at a commercial rate of interest, with annual financial statement reporting required during the loan term.

The cooperative must operate in South Australia and the primary object of the business must be the acquisition of commodities or animals from its shareholders.

Shares representing at least 90% of the value of the cooperative must be held by people who supply the cooperative with commodities or animals for business purposes.

The loan must relate to improving marketing, packing, processing, or storage of primary industry commodities of its shareholders.

The cooperative must have a private ruling from the Australian Taxation Office indicating that it will be eligible for the provisions of Sections 117 – 120 of the Income Tax Assessment Act 1936 (Cwlth).

The loan must be secured with an unconditional bank guarantee from a financier with a minimum Standard & Poor’s A+ long term rating, in a form accepted by PIRSA; this bank guarantee must be for the full term of the loan and be commensurate with the value of the loan outstanding.

The cooperative must demonstrate that it is viable and able to repay the loan.