Farmers and farm-related small businesses have until 30 September 2020 to take advantage of two years’ interest free from the Regional Investment Corporation (RIC) before the drought-related loan terms change.
Drought and AgBiz Drought loans have offered two years’ interest free terms, followed by three years’ interest only and five years’ principal and interest payments. For Drought and AgBiz Drought loan applications made after 30 September 2020, the terms will revert to five years’ interest only and five years’ principal and interest.
RIC CEO Bruce King said farmers and farm-related small businesses had just a few more weeks to submit their loan applications to be eligible for the interest free terms.
“The Federal Government announced in July 2020 that the interest free terms for the RIC’s drought-related loans will end for applications made after 30 September 2020.
“If farmers or farm-related small businesses have been thinking about applying for a loan, then they should submit their application in the next few weeks.
“To qualify for the two years’ interest free, applicants need to ensure the loan application form checklist is completed with the required information and submitted before 30 September 2020,” he said.
“For loan applications made after this date, the interest-only terms are still competitive, particularly at the current 1.92 per cent variable interest rate.
“That still represents an interest payment saving of more than $150,000 compared to commercial rates of around 5 per cent for a $1 million loan over a 5-year period.”
Completed loan applications already received are eligible for the interest-free terms, even if a decision has not been made yet. Approved and settled loans will also retain the full two-year interest-free term before interest payments start.
Drought Loans support farmers to manage, recover from and prepare for drought by covering capital outlay, everyday expenses or refinancing existing debt. AgBiz Drought Loans support farm-related small businesses to cover expenses and pay suppliers.
