Good Morning,
I am happy to say that yesterday afternoon(26th of March), applications for the QRIDA loans from the QLD Government opened along with more details as to how they will determine suitability, information required and the overall process.
This is a rather long email so please take your time.
I spent last night reviewing all this information and have summarised all the key points below:
- Concessional loans are available up to 50 per cent of an eligible entity’s annual wage expense, to a maximum of $250,000.
- The annual wage expense is the average of an entity’s wage expense including superannuation over the 2017/18 and 2018/19 financial years and may include the salaries, or drawings of business owners, if they work in the business.
- Concessional Loans may be used to meet an entity’s working capital expenses. Examples of eligible expenses include: a) paying employee wages; b) paying creditors and existing business loan and equipment finance payments; c) paying rent and rates; d) buying goods, including fuel, for the purposes of carrying on the business.
- Ineligible expenses include: a) refinancing existing business loans or equipment finance; b) purchasing new equipment or other assets.
- To be eligible for a concessional loan applicants must: a) be an eligible business which holds an ABN and is registered for GST, or an incorporated non-profit organisation; b) have one or more equivalent full-time employees in Queensland;
- Have operated the business since 1/7/2017 (need to be in business for at least 2 years)
- You must have suffered a loss of income as a result of COVID-19.
- Eligible business types include sole traders, partnerships, private and public companies and trusts. A full-time employee is an employee who works at least 35 hours each week in the entity. Owners of a business may be regarded as employees if they work in the business.
- Applicants must also: a) be considered viable under normal business conditions; b) be able to service the loan under normal business conditions; c) intend to continue operations after receiving the loan; d) intend to use any surplus liquid reserves or normal credit sources up to normal credit limits, in conjunction with the loan to continue operations.
- Loans up to $100,000 will require no loan security. Loans over $100,000 and up to $250,000 are to be secured by a General Security Agreement.
- The term of concessional loans is 10 years. The first year of the loan will be repayment free and no interest will be charged. Following the first year, payments will be interest-only for two years. After this, principal and interest repayments will apply for the remaining term. Loan payments when they commence will be on a monthly basis.
- The scheme will be open to applications until 25 September 2020, or when funding is fully committed, whichever occurs first.
- Penalties apply for providing false and or misleading information.
- Upon receiving your application, QRIDA will acknowledge receipt by email and let you know if any further information is required to commence your assessment. When assessing applications QRIDA may contact you to discuss your circumstances in more detail. QRIDA will also liaise with your lenders and business advisers as necessary. Applications are assessed in date received order and assessing will not commence until all required information is received. If your application is approved, QRIDA will remit loan funding to your nominated bank account upon completion of necessary loan documentation.
- An annual review of your loan may be required and you will need to provide the necessary financial information when requested by QRIDA. Successful applicants will be required to consent to subsequent audits under the scheme to confirm that loan funds provided have been expended on approved purposes.
Here are a few more points to consider:
- No minimum loan amount applies to these loans.
- The first year of the loan will be repayment free and no interest will be charged. Following this an interest rate of 2.5 per cent will apply for the remainder of the loan.
- Once they commence, loan repayments will need to be made on a monthly basis.
- You can repay the loan at any time during its term.
- There are no added charges if you pay the loan off before the its ten-year term is finished.
- If you are a business owner without any employees you may be eligible for a COVID-19 Jobs Support Loan.
- When your loan repayments commence, they will be drawn from your nominated bank account under direct debit arrangements.QRIDA will arrange a direct debit authority with your loan documentation.
- They have given no timeframe on how long the assessment of the loan application will take. Due to high level of demand and that each needs to be manually assessed, it may take a few weeks for this process to be completed.
- The full amount of loan funds approved should be deposited to your nominated bank account within five business days of QRIDA receiving your returned loan documentation.
- COVID-19 Jobs Support Loans will be open to applications until 25 September 2020 or umtil the $500m is committed.
The following information will be required to be submitted:
- Business financial statements for the 2017-18 and 2018-19 financial years
- Personal taxation returns for the 2017-18 and 2018-19 financial years
- Bank account balances for all business loan and credit accounts (this may be copies of your most recent bank statements or obtained from your internet banking platform)
- Australian Tax Office Integrated Client Account Statement
- Aged list of debtors and creditors at time of application
- Organisation Constitution or Rules of Association and Certificate of Incorporation (if applying as a non-profit organisation)
- Trust Deed (if applying as a trust)
- Identification documents - QRIDA is required to adequately identify loan applicants. To do this, applicants must include copies of at least two of the following identification documents with their application: Australian Driver’s Licence, Australian Passport and Medicare card
After reading all of this , the key take outs is that applications should be submitted sooner rather than later as I can only imagine the influx of applications they will receive.
Action:
If you fit the criteria above and would like to go forward with the application process then we can assist with the completion of the application forms and also collate all the relevant financial and taxation information on my side, then submit the forms and liaise with QRIDA for any further information they may require.
After reviewing the forms and time frames, I think a reasonable estimate is that it will take anywhere from 3-5 hours of time at a minimum to go through the whole process and also allow time to liaise with QRIDA during this process and they may take 1-2 months to work through and finalise the application after which time our fees can be settled , so there is no immediate need to pay for our services.
If you would like for me to commence the process of applying for this loan, and you do believe that you qualify please send me a reply to this email at your earliest convenience so I can commence the work on this.
I may need copies of certain documents(mainly identification documents & copies of current snapshot of bank statements & loans outstanding) from you and I will require for you to sign the completed application form and send back to me for lodgement.
If you have any questions or queries on this, please don't hesitate to contact me.
All the best and stay safe
George
|
|
|
|
