Federal Government Announces Additional $2 Billion For Drought Loans
23 July 2020
- An additional $2 billion announced for the RIC’s drought-related loans
- Applications for interest-free loan terms will close 30 September
- Applications received after 30 September will still have record low interest rates
- AgriStarter Loan applications will open from 1 January 2021
- An additional $50 million in RIC operational funding to deliver more loans
The additional funding is in response to solid demand for RIC's drought loan products and effectively doubles RIC's total farm and small business loan funds to $4b.
Minister for Agriculture, Drought and Emergency Management David Littleproud said unprecedented demand for the concessional loans showed what a useful support mechanism it had become for rural businesses.
"These loans have been critical in helping farmers and small businesses facing hardship due to the drought."
A new record low variable interest rate of 1.92 per cent for farm business loans and 1.46 per cent for water infrastructure loans will be effective from 1 August 2020.
RIC Chief Executive Officer Bruce King said, “The new variable interest rate for farming loans provides valuable savings with interest repayments of around $19,200 per year for a $1 million loan at the variable rate of 1.92 per cent, or $96,000 over five years.”
The RIC’s Drought Loan offers up to $2 million and the AgBiz Drought Loan up to $500,000, both loans are currently interest free in the first two years, for applications received before 30 September 2020.
However, the two-year interest free period, which has been offered since last November, will not be available for Drought Loan and AgBiz Drought Loan applications received after 30 September.
Applications received after 30 September, will be updated to provide a five-year interest-only period, followed by principal and interest for the remainder of the 10-year term.
RIC Chief Executive Officer Bruce King also welcomed the additional $2 billion funding for drought-related loans to support farmers and farm-related small businesses and an additional $50 million in RIC operational funding over the next four years.
“The additional funding announced today will help us to continue to provide affordable loans to the agriculture sector, as well as invest in more resources to support our process and meet the incredible existing demand for our loans as quickly as possible.”
RIC's AgriStarter Loans service designed for the next generation of Australian farmers, will open for applications from 1 January 2021, with an additional $75 million allocated for loan applications this financial year.
The AgriStarter Loan will offer up to $2 million for establishing a new farm business, buying an existing farm business or succession planning. Click here to register your interest for the AgriStarter Loan.
For more information on the funding available please visit the RIC website or contact your local Boyce accountant who can assist you with the application process.