Frequently asked questions
The below questions and answers relate to the Engine and Emerging Industries Fund Loan pilot program:
What is the objective of the program?
The Engine and Emerging Industries Loan pilot program will support regionally based businesses in food and beverage manufacturing industries to adopt advanced manufacturing capabilities. The fund offers eligible enterprises an opportunity to invest in capital that leverages growth opportunities aligned with NSW Government priorities.
What can the loan be used for?
Loans can be used to fund activities that support the enterprise to implement its Business and Project Delivery Plan and invest in new technologies and equipment that will increase efficiency and productivity. Applicants can apply for funding for activities that commenced on or after 1 April 2024.The loan can be used to fund investments that will result in:
- implementation of advanced manufacturing techniques and technology
- expansion of existing advanced manufacturing capabilities
- access to external expertise that is directly related to delivery of the project
- purchase and/or installation of specialist equipment and/or infrastructure necessary to progress the project including mobile equipment
- intellectual property protection or advice
- increased capabilities/efficiencies of pre or post-production phases, for example, implementation of pre-market and/or after-market service activities.
Can I claim for expenses incurred prior to lodging my application?
Yes, eligible expenses that were ordered, purchased or installed on or after 1 April 2024 can be claimed under the Engine and Emerging Industries Loan pilot.
Can I use the loan across various purchases or projects?
Yes, when completing your application, you can provide an indication of various purchases and projects that you intend to use the loan funds for. Please keep in mind that purchases and projects must relate to the loan purpose you nominate when applying.
How much funding is available under the pilot program?
The allocated funding for this program is $5 million. Eligible businesses may apply for a loan of between $100,000 and $1 million. The availability of loans is subject to funds being available and no loans will be offered beyond the allocated funding. Applications will be assessed in the order they are received by the RAA.
What if funding is allocated before I get a chance to apply?
The Engine and Emerging Industries Loan program is a pilot program with limited funding. When the full allocation of funding has been requested, a registration of interest online form will be made available on the RAA website. Individuals who would like to be notified of any future programs based on the pilot, can register their interest using the online form.
Which businesses are eligible for the loan?
The Engine and Emerging Industries Loan is available to eligible sole traders, partnerships, trusts or private companies who operate in the food product manufacturing or beverage manufacturing industries in regional NSW. To be eligible, enterprises must be able to demonstrate long-term viability and a capacity to repay the loan. They must have less than 200 employees, be classified under one of the eligible ANZSIC codes, have a suitable Business and Project Delivery plan and should not have had turnover greater than $250 million. Please refer to the program guidelines for details.
What information do applicants need to provide with their application?
Applicants must provide a complete application form and a copy of the following documents:
- last three years’ tax returns, balance sheets and financial statements of the enterprise (these include profit and loss statements, trading account and depreciation schedules)
- Local Government Area (LGA) rates notice or lease agreement where the business primarily operates
- Business and Project Delivery Plan
- trust deed (if applicable)
- monthly cash flow budget for the next twelve months.
Please note that documents should be scanned individually as they will need to be uploaded to specific sections throughout the form. The online form has file size restrictions (approx. 20MB total) and therefore you should ensure each file you intend to upload is 2.5MB or less to avoid submission issues.
How long do I have to apply?
Applications opened on 17 May 2024 and will be accepted until funding is exhausted.
How long do I have to draw down on the loan once my application is approved?
The loan must be fully drawn down within 18 months of the loan being established (18 months from the date of the signed letter of offer).
How long do I have to repay the loan?
The maximum loan term is seven years with monthly, quarterly, bi-annual or annual repayments. Loan repayments are interest only for the first two years. After the initial interest only period, principal and interest repayments will commence for the balance of the loan period, being not more than five years.
What is the interest rate on the loan?
Interest is charged monthly at a fixed interest rate of 2.5%, which is applied for the life of the loan and compounds. Interest accrues from the date that the loan is first drawn down.
What security is considered to support an Engine and Emerging Industries loan?
Security by way of charge and caveat over equipment or property is preferred. Alternate security will be considered on a case-by-case basis. The Authority will take security in the form of a Specific Security Deed over equipment and/or a general security deed over equipment or personal property by way of registered PPSR (Personal Property Security Register). The equipment and / or personal property used to secure the loan must be owned by the applicant. The Authority may request VIN numbers and insurance information if applicable.
How do I access the funds once approved?
Once you have been notified that your loan application has been approved, documentation will be sent to you for review and signing. Once signed documentation has been returned to the RAA and security has been registered, your loan will be set up in the system and the RAA will send you an email with instructions on how to access funds by submitting a claim request. Upon approval of your claim request, payment will be processed to your nominated bank account. Please note that the RAA will not pay suppliers directly.
Can I use the Engine and Emerging Industries Loan to refinance debt?
No, the loan can't be used to refinance debt, however invoices can be backdated to 1 April 2024.
Do I need to use a standard Business and Project Delivery Plan template?
No, we acknowledge that you may have already had a plan prepared and you are welcome to provide this if it meets the minimum requirements set out in the program guidelines. If you do not already have a plan, you can use the template provided on our website as a basis.
Will I incur break costs if I pay out the loan early?
Yes, break costs may be payable. This cost will be calculated at the time the contact is broken and will take into consideration the following:
- total loan term
- loan length remaining on your fixed loan contract
- total value of the loan
- the fixed interest rate applied to your loan
- current fixed interest rates on offer from that lender (RAA).
Is GST included in any payment received?
No. The GST component of any invoice received can be claimed on completion of your Business Activity Statement (BAS). The RAA will not issue a Recipient Created Tax Invoice (RCTI) on payment of the funds and you should retain the ‘Payment Advice’ that is forwarded as a record for taxation purposed.
How does the RAA protect itself against fraud?
The RAA has a strong commitment to fraud prevention, detection, and response. Making a fraudulent claim, 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 Prevention webpage.
Where can I get assistance?
Translations
If you need assistance with interpreting or translating, please contact Multicultural NSW on 1300 651 500 or email languageservices@multicultural.nsw.gov.au.
Rural Assistance Authority
If you have any further questions regarding programs being delivered via the Rural Assistance Authority, please contact the team on 1800 678 593 or email rural.assist@raa.nsw.gov.au.