Loans to Cooperatives Scheme

Key dates

This scheme is ongoing, with applications assessed on a case by case basis.

Scheme details

The Department of Primary Industries and Regions (PIRSA) provides loans to eligible cooperatives engaged in processing and storing primary product.

The scheme enables cooperatives to claim generous Commonwealth taxation benefits on the loan facility, by claiming interest, depreciation, and principal repayments, where the loan is provided by a government source.

The maximum loan term is 10 years, with a commercial rate of interest charged.

During the loan term, the cooperative is required to submit annual financial statements to enable an annual review of trading performance to be undertaken.

Find out more information about cooperatives in Australia:

• Business Council of Co-operatives and Mutuals (BCCM)
• Australian Government co-operatives
• South Australian Government co-operatives

Eligibility

Your cooperative must meet these conditions to be eligible for the loan:

• 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 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.

How to apply

The cooperative must submit:

• a detailed proposal that outlines the requested loan purpose, amount, term, security, and demonstrates its viability and ability to repay
• a copy of its constitution to demonstrate it has the necessary powers to borrow
• a copy of the private tax ruling from the Australian Taxation Office
• an unconditional bank guarantee.