News releases – Tom Koutsantonis

Arrium suppliers access State Government financial lifeline

Tom Koutsantonis May 24, 2016

Two Arrium suppliers have accessed the State Government’s new interest-free Whyalla Small Business Loan Scheme in order to address cash flow issues associated with the Arrium Administration.

Treasurer Tom Koutsantonis has approved the application for a $165,000 loan to DSE Civil Pty Ltd, a Whyalla-based specialist concrete supplier.

Mr Koutsantonis has also approved a loan of $90,000 for Delmac Power Equipment, which supplies a range of industrial equipment, such as engines, generators and pumps. He contacted both businesses today to notify them of the success of their applications.

There are an additional 14 businesses who are having applications for loans considered.

Background

The Whyalla Small Business Loan Scheme was launched earlier this month to support small businesses experiencing cash-flow challenges as a result of Arrium entering administration.

The scheme is funded through $10 million from the Regional Development Fund and was established to support the suppliers to Arrium who may have had payments frozen as a result of the Administration process.

Under the scheme interest-free loans of up to $750,000 are available to South Australian businesses that supply Arrium. Applications for loans are considered on a case by case basis and provided over a term of up to three years.

On 22 April Treasurer Koutsantonis and Member for Giles Eddie Hughes 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

There is an intricate supply chain in Whyalla which supports the operation of Arrium, and those companies are struggling as a result of the Administration process, which has resulted in payments to many suppliers being frozen.

At the request of local member Eddie Hughes, I travelled to Whyalla last month to meet these businesses and ask what the government can do to ensure they can continue to operate.

The State Government launched the Whyalla Small Business Loan Scheme to relieve the cash-flow blockage these suppliers are experiences.

In just a few weeks, 16 Arrium suppliers have applied to access the interest-free loan scheme, and two of those businesses have already had their applications accepted.

These loans will clear the cash-flow blockage these businesses are experiencing.

Quotes attributable to Member for Giles Eddie Hughes

Small and medium sized businesses in Whyalla are hurting, and the last thing we want is to succeed in securing the ongoing viability of Arrium, only to find the supply chain in Whyalla has collapsed around it.

This would be a terrible outcome for Whyalla, and this scheme will go a long way towards ensuring that doesn’t happen.

 

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