The State Government today announced the introduction of an interest-free loan scheme to support small businesses experiencing a cash-flow challenges as a result of Arrium entering administration.
The program, funded by $10 million from the Regional Development Fund, has been established to support the Arrium supply chain through the administration period where payments which are due may have been frozen.
The interest-free loans of up to $750,000 will be available to South Australian businesses. Applications for loans will be considered on a case by case basis and provided over a term of up to three years.
Grants may also be offered in special circumstances in place of a loan or in combination with a loan.
Treasurer Tom Koutsantonis and Regional Development Minister Geoff Brock will join the Premier in Whyalla tomorrow to meet with Administrators, Arrium management and visit local companies.
Arrium entered voluntary administration last month after a sustained period of low commodity prices and the dumping of cheap, low-quality foreign steel in the Australian market.
Treasurer Tom Koutsantonis has travelled to Whyalla twice in recent weeks to meet with local Arrium suppliers and community groups.
On 22 April Treasurer Koutsantonis and Small Business Commissioner John Chapman hosted a round table meeting attended by about 40 Arrium suppliers, who raised concerns about the cash flow blockage caused by the Arrium administration and the risk that placed on the ongoing viability of their businesses.
In addition to this loan initiative the Government has engaged accounting firm Hood Sweeney to provide free financial counselling support, and legal firm Thomson Geer to provide small businesses with legal advice.
Quotes attributable to Treasurer Tom Koutsantonis
During recent visits to Whyalla I saw first hand the difficulties businesses in the region are facing.
There is a severe cash flow issue for the Arrium supply chain which has rippled through Whyalla’s small business community.
This loan system should inject a positive cash flow and ease the burden for those businesses doing it tough at the moment, and is designed to compliment the administrator’s work.
The State Government wants to ensure that when and if Arrium comes out of administration the supply chain is still there to ramp up production and meet the company’s needs.
It is important that those small businesses are given every opportunity to survive in the longer term.
I’d like to thank Regional Development Minister Geoff Brock for his passionate and tireless advocacy of the Whyalla community and Upper Spencer Golf region.
The State Government will soon release its plans for investment in the plant to create a more efficient and profitable business.
Quotes attributable to Regional Development Minister Geoff Brock
Today’s further funding commitment from the Regional Development Fund is additional to the $8 million already allocated in economic assistance for the Upper Spencer Gulf and Outback.
That funding includes up to $5 million in Round 3 of the Regional Development Fund and a $2 million small grants program allocated to specifically support projects which will create jobs and drive economic growth in the region.
In August last year, the State Government announced an initial $1 million jobs creation and support package for the Upper Spencer Gulf and Outback.
Quotes attributable to Member for Giles Eddie Hughes
Whyalla is a resilient community and we are confident the city and its businesses can make it through this difficult period.
This loans scheme will support many businesses in Whyalla and give them the security and cash flow they need to continue trading while payments from Arrium are frozen.