Tasmanian Industry Support Scheme
Extended Scheme March 2009
Guidelines
Introduction
The extended Tasmanian Industry Support Scheme is an initiative of the Tasmanian Government that will provide support for sustainable private sector businesses which are otherwise at risk of closure or significant downsizing, or are experiencing an impaired investment capacity, as a result of the current volatility in financial markets and the consequent credit conditions.
Objective
The aim of the scheme is to provide a short to medium term loan facility for Tasmanian businesses to:
- support investment projects and activities for which private sector finance would have been available if not for the volatility in credit markets; or
- maintain business operations and employment through temporary downturns in business activity.
Eligibility Criteria
Applications will be accepted from businesses that:
- are Tasmanian based and produce or significantly value add to goods or services in Tasmania; and
- are a registered business with the ATO for the purpose of goods and service tax (GST) assessments
Not Eligible:
- any government body or agency
- charitable and not-for-profit organisations
- businesses that are not based in Tasmania or are not primarily operating in Tasmania
- proposals for which more appropriate forms of financial assistance are offered by the Department of Economic Development and Tourism (for example Enterprise Growth Program) or another State Government agency, and
- proposals relating to:
- hire purchase facilities
- new housing or personal loans
- refinance of housing or personal loans
- speculative property developments.
Assessment Criteria
Applicants and proposals should demonstrate net economic benefits to Tasmania consistent with the Department’s Financial Assistance to Industry Principles. These principles are available on the Department’s website at www.development.tas.gov.au.
Applicants will need to demonstrate that:
- their investment proposals or existing credit facilities have been curtailed or restricted as a direct result of the lack of available credit in current market conditions; or
- their business is suffering a temporary downturn threatening employment levels and they are unable to source adequate capital support from commercial lenders or from other sources such as equity funding through retained earnings.
Applicants must demonstrate that their business has long term viability, and has the ability to repay the loan (via up to date financial statements and cash flow budgets, business and marketing plans).
Applicants must be able to provide satisfactory loan securities and enter into sustainable loan repayment schedules.
Management capability and governance structures are to be demonstrated as sound.
Applicants must be able to demonstrate that the provision of the loan facility would not have a materially adverse effect on investment or employment for one or more other businesses operating in Tasmania.
Operation of Scheme
TISS commenced on 14 November 2008, with the extended scheme commencing 27 March 2009. The scheme will operate for a period not exceeding 18 months from the original commencement date pending a review of the scheme.
The Department will consider and administer loans for TISS under the Tasmanian Development Act 1983.
At the time of the requested TISS facility, applicants will need to meet the assessment criteria to enable consideration for financial support, and will need to maintain minimum levels of Key Performance Indicators (KPI’s) during the period of any facility provided under TISS.
In exceptional cases, a TISS facility may provide the full financing needs of a business. However preference will be given to applications where commercial lenders will provide the majority, or some part, of the financing requirement and/or where the business owners or other parties contribute additional capital investment.
Commercial interest rates and terms and conditions will apply to all TISS loans.
General Terms and Conditions of the Proposed Program
- Loans generally ranging from $50 000 to $2 million will be considered.
- Loan interest rates will be in accordance with the Department’s Interest Rate Determination Policy (and will generally be at a rate not less than the rate that would be charged by the private sector for a comparable credit facility).
- Regular financial and operational reporting at the discretion of the Department.
- Security for all loans provided will generally include joint and several guarantees from the Directors/Principals in addition to any other available security.
- Repayment terms to be negotiated but generally no longer than seven years.
- The Department must be satisfied that the applicant is committed to actively seeking refinancing as soon as financial circumstances improve, including within the loan period.
- Successful applicants during the term of the facility will maintain employment at an agreed level, unless circumstances are previously endorsed by the Department. The Department may request repayment of the financial assistance if employment levels are not maintained, or if prior endorsement of changed employment levels is not recognised by DEDT. The provision of periodic staff declarations may be required.
Application Form
Click here to download the application form (MS Word)
For further information please contact Business Point on:
Phone: 1800 440 026
Email: businesspoint@development.tas.gov.au
Appendix 1
Financial Assistance to Industry Principles
In considering assistance under this scheme the following principles will generally be considered:
- Strategic Benefit
The proposal should demonstrate potential net economic benefits to Tasmania. These benefits include:
- Employment
- Investment
- Exports
- Import replacement
- Research and Development investment
- Adoption of new technology
- Attraction and development of new skills
- Development of important elements of an industry value chain
- Supports future industries and economic growth
- Sustainability
Sustainability is a multi-faceted concept. When assessing sustainability it is useful to address the following type of questions:
- Does the proposal have a sustainable competitive advantage?
- Is the proposal viable without ongoing Government subsidy?
- Does the proposal complement Tasmania’s areas of comparative advantage?
- Is the proposal footloose?
- Is the proposal market based?
- What are the size and growth prospects for the intended market?
- Capability
Good projects require good planning and good execution. When considering the issue of capability, reference to the following should be made:
- Does the management team have the appropriate skills, experience, track record and strategic alliances?
- Has a proper business plan been prepared?
- Does the business have the appropriate financial resources or financial structure?
- Does the business have the necessary legal issues resolved – shareholder agreements, protection of intellectual property, terms of trade, supplier agreements, distribution arrangements, channel partners?
- Value for Money
In general, the department should seek to maximise the outcomes from our limited financial resources. The use of comparative measures to assess the value for money from a proposal can assist in maximising outcomes.
- Competitive Neutrality
The government does not seek to interfere in the normal functioning of the economy. Particular care must be taken when granting financial assistance at an enterprise level that this does not unduly disadvantage other Tasmanian businesses.
Where many firms exist in an industry sector, financial assistance should be directed at proposals that advantage all industry players, or at least do not disadvantage any particular player(s).
However, for the purposes of TISS, competitive neutrality will not be met where a loan facility, if provided, would have a material negative impact on another business in Tasmania.
