Co-Operative Loan Services
The NSW Government, through TCorp as its agent, can lend to New South Wales co-operatives on a fixed rate or floating rate basis. Subject to initial approval by the NSW Premier’s Department, loan details and processing are as follows:
- All loans must be supported by a letter of credit or guarantee from a bank with a credit rating of at least "A" from Standard & Poor’s rating agency.
- Independent tax advice is required regarding the loan’s deductibility in relation to section 120(1)(c) of the Income Tax Assessment Act
- Interest will normally be payable at 6-monthly intervals on the outstanding balance of the loan at an interest rate calculated by adding a margin to TCorp’s own borrowing cost. This margin is determined according to the credit rating of the bank supplying the letter of credit.
- Maximum permissible term of a loan depends on the credit rating of the bank supplying the letter of credit, ranging from 3 years for a credit rating of A to 15 years for AAA rating. (However, term will also be limited by the period for which the bank is willing to provide the letter of credit.)
- A moderate loan establishment fee is payable by the co-operative, plus the legal costs incurred by the Government and TCorp in setting up and documenting the loan.
- There will normally be provision for the borrower to prepay the loan prior to its maturity date, subject to certain conditions and moderate fees.
- The NSW Government and TCorp are in no way responsible for the availability of any tax deduction in connection with a loan.
- Potential borrowers or their banks are able to discuss commercial details with TCorp on 9325 9227
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