July 23, 2020
The Federal Government is providing further assistance to farmers and small businesses by providing an extra $2 billion in drought loan funding to the Regional Investment Corporation (RIC) for 2020-21.
Finance Minister Mathias Cormann said the extra funding doubled the amount available for farm and small business loans to $4 billion.
“This funding is available this financial year to ensure support is provided where it is most needed and with the best possible impact,” Minister Cormann 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.”
However, the extra funding comes with changes to loan terms.
The two-year interest-free period won’t be available for Drought Loan and AgBiz Drought Loan applications received after September 30.
“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,” Agriculture Minister David 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 two-year interest-free period.
“For applications received after September 30, a five-year interest only period will apply, followed by principal and interest for the remainder of the 10-year term.
“The interest rates for Farm and Small Business Loans will drop to 1.92 per cent, effective from August 1.”
Mr 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 January 1, 2021.