Additional loan funding for farmers and rural businesses

Wednesday, July 22, 2020
Brisbane
News

Regional and rural communities are the heart of this country.

The agriculture industry will contribute an estimated $60 billion to our economy in 2019-20 and Australian farmers work hard to produce the food and fibre that keeps us and our families healthy and our economy going. It’s crucial that we get behind them as they manage and recover from drought.

The Australian Government is providing further assistance to farmers and rural and regional small businesses, with an additional $2 billion in loan funding for the Regional Investment Corporation (RIC) for 2020­-21. 

Speaking in Brisbane at the National Drought and North Queensland Flood Response and Recovery Agency headquarters, Minister for Agriculture, Drought and Emergency Management David Littleproud said the new funding doubles the amount available for RIC’s sought-after drought loan products. 

“These loans have been critical in helping farmers and small businesses facing hardship due to the drought. The additional $2 billion is available this financial year to ensure support is provided where it is most needed and with the best possible impact,” Minister Littleproud said.

Parts of Australia have had good rainfall and the RIC’s drought loans can be used for recovery activities such as replanting and restocking.

The RIC will also receive $50 million more in operational funding over four years to deliver the additional loan funding, as well as process the significant volume of applications already on hand.

The additional loan funding comes with changes to loan terms. For applications received after 30 September 2020, the two-year interest free period will no longer be available for the Drought Loan and AgBiz Drought Loan.

“The Government announced the two-year interest free terms for these loans in November last year in response to the severe drought conditions that were being experienced in many parts of the country. With conditions improving it is now time to revert back to the previous concessional terms for the RIC’s loans,” Minister Littleproud said.

“I understand that parts of Australia are still experiencing drought and it will also take a number of years to recover. I encourage farmers and small businesses to get their application in before the end of September if they want to receive the benefit of the 2-year interest free period”.

“The interest rates for Farm and Small Business Loans will drop to 1.92% effective from 1 August 2020. These concessional terms will still enable rural businesses to save thousands of dollars a year on interest bills and put those savings to better use.

Minister Littleproud also announced that the RIC’s AgriStarter Loans, designed to support people in establishing a new farm business, buying an existing farm business or undertaking succession arrangements, will receive $75 million in 2020-21 and become available from 1 January 2021.

“The Government understands the importance of encouraging a new generation of farmers to the sector and the AgriStarter Loans will be a useful program to support this.”

For more information about RIC loans, please visit the RIC website or call 1800 875 675.