A $25,000 “restoration grant” for uninsured owners of small businesses and farms directly affected by the Victorian bushfires really isn’t like an insurance payout, according to the corporation administering the scheme.

But people who are insured will still have to pay the grant back when their insurance claim is paid.

Prime Minister Kevin Rudd and Victorian Premier John Brumby unveiled an initial $25 million aid package last week. The package also includes subsidised loan packages of up to $200,000, repayable over 15 years at an interest rate of 3.2%.

Victorian Government services are also providing free business advice and counselling.

The state’s Rural Finance Corporation has been charged with administering the first stage relief package. In a statement, the corporation discourages any perception the Victorian Government is acting as an insurer of last resort.

It says the grant “is not intended to replace the need for insurance, and is not intended to provide compensation for losses”.

“Thousands of small businesses have been directly damaged or destroyed by these terrible bushfires,” Mr Rudd said. “Providing help straight away is crucial to helping them get back on their feet.”

An initial $5000 grant is available to cover immediate cleaning and restoration costs. A further $20,000 is available on a case-by-case basis.

Insured businesses and farmers will have to pay back any amount handed out for provisions covered under their policies. For those who are not insured, it’s a gift.

“Any grant for clean-up work that is subsequently covered by an insurance claim is to be repaid,” the corporation said.

ICA research suggests up to 30% of property affected by the Victorian bushfires will have been uninsured.