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Succession Planning in the Rural Sector – Succession Loans
Purpose The purpose of a succession loan is to provide financial support to farm business successors and farm asset successors who are taking over or acquiring an interest in a farm business. These loans aim to facilitate the smooth transition of ownership and management from one generation to the next, ensuring the continuity and […]
Succession Planning in the Rural Sector – Succession Loans
Purpose
The purpose of a succession loan is to provide financial support to farm business successors and farm asset successors who are taking over or acquiring an interest in a farm business. These loans aim to facilitate the smooth transition of ownership and management from one generation to the next, ensuring the continuity and viability of the farm business.
Succession loans can be used for various purposes, including purchasing farm assets, financing business expansion, providing working capital, debt consolidation, and supporting succession planning (i.e. paying the cost’s associated with the succession planning process, legal costs or stamp duty).
Federal Government Assistance Available
Succession loans are a type of AgriStarter loan that is available to farm business successors (i.e. have recently inherited or will inherit an interest in a farm business, or have recently acquired or will acquire an interest in a farm under a succession plan) and farm asset successors (i.e. hold the sole or a controlling interest in a farm business, and have recently inherited or will inherit farm assets, or have recently acquired or will acquire farm assets under a succession plan).
These loans are granted under the Regional Investment Corporation (Agristarter Loans) Rule 2019.
To be eligible for a succession loan, the applicant must be a farm business successor or a farm asset successor. The loan amount for succession loans can be up to $2 million, and the loan term is 10 years with interest-only repayments for the first five years and principal and interest repayments for the final five years. The loan must be fully drawn down within six months of signing the loan agreement. The loan security requirements include providing sufficient and satisfactory security, such as a registered mortgage over land or other assets.
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Application Process
The loan application process involves completing an application form and providing associated documents. The Regional Investment Corporation (RIC) will assess the application based on eligibility criteria specified in the guidelines. If the loan application is accepted, the applicant must sign a loan agreement with the RIC. The applicant is responsible for all costs incurred in the preparation and lodgement of their application. Throughout the term of the loan, the applicant is required to provide information to the RIC as specified in the loan agreement. The RIC conducts annual loan reviews to monitor compliance and assess the ongoing capacity of the farm business to meet the terms and conditions.
More information on succession loans from RIC is available at: AgriStarter Loan – Regional Investment Corporation
How Aylward Game Solicitors Can Help
Navigating the legal intricacies of succession planning can be challenging. Aylward Game Solicitors, with their extensive experience in succession and estate planning, can provide the guidance and support you need. Our expert team will work with you to review and update your succession and estate plan, ensuring it reflects your current circumstances and future wishes. We offer personalised advice and legal strategies to protect your assets and provide for your loved ones, giving you the peace of mind you deserve.
If you need assistance with updating your succession and estate plan, contact our office to book an appointment.
Get Ahead with Expert Legal Guidance
Trust Aylward Game Solicitors to Navigate Your Legal Challenges
FAQs
Who is eligible for a succession loan?
Succession loans are available to farm business successors who are inheriting or acquiring an interest in a farm business. They are also available to farm asset successors who inherit or acquire farm assets under a succession plan.
What purposes can succession loans serve?
Farm assets, business expansion, working capital, debt consolidation, and succession planning costs like legal fees or stamp duty are all expenses that succession loans can cover.
What are the terms of repayment for succession loans?
The loan term is ten years. It features interest-only repayments for the first five years, followed by principal and interest repayments for the remaining five years.
What security does a succession loan require?
Applicants must provide satisfactory security, such as a registered mortgage over land or other assets.
How do I apply for a succession loan?
The application process involves completing a form, submitting required documents, and undergoing assessment by the Regional Investment Corporation (RIC).
How can Aylward Game Solicitors assist with succession planning?
Aylward Game Solicitors provides legal expertise in succession and estate planning. They guide clients through reviewing and updating their plans to protect assets and ensure the effective fulfilment of their wishes.
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