Agristarter loan

AgriStarter Loan

Loans to assist first-time farmers and loans to support farm succession arrangements

Purpose

To encourage and support people in obtaining their first farming business.

To assist with farm business succession planning and giving effect to succession plans.

Use this loan to:

  • Fund purchases

    Fund the purchase of an existing farm business, land, infrastructure and other assets as part of establishing or developing a farm business.

  • Fund succession

    Buy out relatives during farm business succession. Pay costs associated with the succession planning process, legal costs or stamp duty.

  • Invest

    Invest in new infrastructure, machinery or productivity enhancements.

  • Refinance debt

    Refinance certain existing farm-related debt at our low interest rate to improve cash flow.

Loan terms

$2m
Maximum amount
3.04%
Variable rate
10
Year term
5
Years interest only
No fee
Extra repayments
No fee
Application
$0
Early settlement
Redraw
Not available
Percentage of total debt

At least 50% of your total debt must stay with a commercial lender.

Frequency of repayments

Tailored to the cash flow of the farm business.

Repayment structure

Five years interest only, then five years’ principal and interest over a 10-year loan term.

After 10 years, you can refinance any remaining balance with a commercial lender.

Full terms and conditions are available in the loan guidelines.

Loan types

There are two kinds of AgriStarter loans – first farmer loans and succession loans.

You can apply for a first farmer loan if you are seeking to purchase, establish or develop a farm business in which you hold or will hold the sole interest or a controlling interest.

You can also apply if you are a lease or share farmer and wish to purchase, establish or develop a farm business, even if this results in the business no longer involving share farming or leasing.

You can apply for a succession loan if your farm business is undertaking or has undertaken succession planning.

Refer to the loan guidelines for further eligibility requirements.

Eligibility

You
  • are an Australian citizen or permanent resident
  • contribute or plan to contribute at least 50% of your labour to the farm business
  • earn or plan to earn at least 50% of your income from the farm business (under normal circumstances)
Your business
  • is in financial need of a loan
  • is financially viable or has sound prospects of becoming financially viable within the term of the loan
  • undertakes all primary production aspects of the business wholly within Australia
  • operates as a sole trader, partnership, a trust or a corporation
  • is registered for tax purposes in Australia with an ABN and is registered for GST
  • has the capacity to repay the loan
  • has existing commercial debt or can obtain commercial debt
  • is not under external administration or bankruptcy
  • has at least one member who is an Australian citizen or a permanent resident
  • has a connection to ‘constitutional trade and commerce’
You must
  • provide security for the loan
  • secure the support of your commercial lender for the proposed loan
  • repay the loan
You cannot use this loan for
  • purchase of private and domestic assets
  • payment of private and domestic expenses
  • purchase of and/or investment in non-farm assets and payment of non-farm expenses
  • paying out dividends
  • reimbursement for depreciation of assets tax or other statutory payments
  • your own labour costs
  • anything that you have already received government funding for (except to refinance debt from previous concessional loans)
  • any other non-eligible use listed in the loan guidelines

Eligible industries

The eligible primary production activities undertaken by a farm business to access RIC’s Farm Business loans, are those listed as part of the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (Revision 2.0) codes for agriculture and aquaculture, with some exceptions.

View the details of primary production activities identified in DIVISION A – AGRICULTURE, FORESTRY AND FISHING of the industry classifications.

Before you apply

You need to check
You need to provide
  • Australian Business Number
  • financial history
  • identity documents
  • proof of eligibility
Ask us a question

We are here to help

View the answers to common questions about the AgriStarter Loan.

Apply

There are two ways to apply for an AgriStarter Loan.

We encourage you to apply online.

You may need to contact your trusted financial advisor or the Rural Financial Counselling Service (RFCS) to help you complete your application.

  • Follow the AgriStarter Loan Document Checklist to ensure you submit a complete application.

  • The online form has mandatory fields and documents. You must supply this information to progress to the next stage of the form.

  • You must submit all required information so we can start assessing your application and provide an outcome as quickly as possible.

  • Once you begin you will have 30 days to submit your online loan application. You will receive a reminder at 10, 20 and 30 days.

Apply now Resume application

  • Follow the Document Checklist at the start of the AgriStarter Loan Application Form.

  • We can’t start assessing your application until we get all the information we ask for, including attachments.

  • Email your application to applications@ric.gov.au or post to:

Regional Investment Corporation, PO Box 653, Orange, NSW, 2800.

AgriStarter Loan Application Form

Please note:

  • You can complete this form on a computer (fillable PDF) or you can print it and fill it in by hand.

  • To use the fillable PDF application form you must download it to your desktop first. Right click on the link above and select 'save target as' or 'save link as' and download the form to your desktop. Open the form on your desktop using Acrobat Reader. Make sure you save the application form regularly as you are filling it in.

  • The fillable PDF form will not function correctly when it is opened in a web browser or other software, for example Microsoft Edge, Chrome, Firefox, Preview. You are not able to save the form when opened in a browser.

  • You can download a free version of Adobe Acrobat Reader DC software.

Resources

Guidelines

We will assess your application against the criteria in the loan.

Read the detail on who can apply for a loan and what happens after you apply.

Application form

Please note:

  • You can complete this form on a computer (fillable PDF) or you can print it and complete it by hand.

  • To use the fillable PDF application form you must download it to your desktop first. Right click on the link and select 'save target as' or 'save link as' and download the form to your desktop. Open the form on your desktop using Acrobat Reader. Make sure you save the application form regularly as you are filling it in.

  • The fillable PDF form will not function correctly when it is opened in a web browser or other software, for example Microsoft Edge, Chrome, Firefox, Preview. You are not able to save the form when opened in a browser.

  • You can download a free version of Adobe Acrobat Reader DC software.

Cash flow budget

You must include your business cash flow budget with your application.

We will use this to help assess your financial position, and your ability to repay the loan.

If you do not have your own budget spreadsheet, you can use our template.

Note: This template may not meet government accessibility requirements. Contact us for help.

Statutory declaration

You may need to make a statutory declaration to support your application.

Commonwealth statutory declaration

Commonwealth statutory declaration

Guarantor asset and liability statement

You may be required to provide a guarantor's asset and liability statement with your application.

Guarantor asset and liability statement

Guarantor asset and liability statement

Guidelines

We will assess your application against the criteria in the loan.

Read the detail on who can apply for a loan and what happens after you apply.

Application form

Please note:

  • You can complete this form on a computer (fillable PDF) or you can print it and complete it by hand.

  • To use the fillable PDF application form you must download it to your desktop first. Right click on the link and select 'save target as' or 'save link as' and download the form to your desktop. Open the form on your desktop using Acrobat Reader. Make sure you save the application form regularly as you are filling it in.

  • The fillable PDF form will not function correctly when it is opened in a web browser or other software, for example Microsoft Edge, Chrome, Firefox, Preview. You are not able to save the form when opened in a browser.

  • You can download a free version of Adobe Acrobat Reader DC software.

Cash flow budget

You must include your business cash flow budget with your application.

We will use this to help assess your financial position, and your ability to repay the loan.

If you do not have your own budget spreadsheet, you can use our template.

Note: This template may not meet government accessibility requirements. Contact us for help.

Statutory declaration

You may need to make a statutory declaration to support your application.

Commonwealth statutory declaration

Commonwealth statutory declaration

Guarantor asset and liability statement

You may be required to provide a guarantor's asset and liability statement with your application.

Guarantor asset and liability statement

Guarantor asset and liability statement

AgriStarter 10-year loan term ticks all the boxes for ag start-up

Angas and Melissa used a RIC AgriStarter Loan during the start-up phase of their fishery Goodoo Farms.

Common questions

The RIC will work with the applicant and commercial lender to determine the security arrangements through mutual agreement.

The RIC does not insist on first mortgage and has worked closely with all main rural lenders to create protocols to speed up security discussions and arrangements.

Loans are expected to have sufficient security within standard lending practices. Security will be assessed on a case-by-case basis.

It can include a registered mortgage over land, a registered mortgage over livestock or a registered security interest in water rights.

Security values are generally discounted to the purchase price or owner estimated value.

AgriStarter Loan applicants are expected to have built up equity prior to applying.

Addressing security requirements may be assisted through the applicant’s cash contribution to their purchase or security over unencumbered off-farm assets e.g. residence or investments.

If a successor is purchasing an interest in the farm business, it is expected that their bank will apportion the relevant debt to the successor in line with the share they are purchasing.

Consequently, they will be taking on commercial debt in their own name.

A business that derives the majority of its income from primary production within the agricultural, horticultural, pastoral, apicultural or aquacultural industries.

Read more about eligible industries

Yes, if the vendor finance is set on commercial terms (i.e. a commercial interest rate), with set regular repayments and a written agreement that could be considered eligible commercial debt and the AgriStarter Loan could supply the other 50% of the debt required up to $2 million.

The Year In Year Out (YIYO) cash flow projection will be important in our credit assessment.

This should reflect the operation once it has developed to full productive capacity.

We will require at least two years of projected cash flows.

Applicants are encouraged to supply cropping plans or stock schedules to support the transition to achieving the YIYO cash flow.

For applicants undertaking the establishment of tree crop enterprises, cash flows should reflect the emerging productive capacity of their trees and the YIYO cash flow will need to demonstrate the viability of the enterprise within the 10-year term of the loan.

Yes, cash flow and production forecasts should demonstrate how, with the assistance of the AgriStarter Loan, the applicant will meet the loan guidelines.

Applicants are encouraged to discuss their intention to apply for an AgriStarter Loan with their bank prior to application.

Ideally the bank’s commitment should be known prior to applying.

Applicants should seek their own independent financial advice in determining if an AgriStarter Loan is the right option for you.

The AgriStarter Loan is for new entrants to primary production. This was required when the loan was established.

Potential applicants who are not ‘recent’ entrants should not self-assess and may still be eligible to apply provided they are able to provide financial and physical reasons why the development of their enterprise has been impacted by events beyond their control and demonstrate the need for the AgriStarter Loan.

Applicants must operate as a sole trader, partnership, trust or corporation. If an applicant is operating multiple trusts, we encourage you to clearly identify the interplay between those trusts.

Potential applicants are encouraged to contact us on 1800 875 675 to discuss individual circumstances.

Loan scenarios

Tom and Alice have always wanted to own their own farm after Alice spent a lot of time in regional Victoria on farms with her father who was a shearer. Tom caught the farming bug showing steers with his school. They have both worked hard to establish a small residential property portfolio and a small beef cattle breeding herd currently being agisted on the property that Tom is managing. The portfolio and cattle provide them with equity and security to access a loan to buy their first farm.

They have spoken to their bank about applying for a loan to purchase a farm and will apply for an AgriStarter Loan. They plan to finance up to half of the purchase and pay interest only on the RIC portion of the loan for the first five years, allowing to build equity with their bank loan. With Tom’s relevant management experience and ongoing employment, they have provided a comprehensive business plan on how they plan to repay the RIC loan during the term. The business plan includes how they will develop the property, build up breeder numbers and expand their operation so the farm will be their principal business and be able to supply interstate markets.

Melissa is a fifth-generation South Australian grazier who joined the trading partnership with her parents at the first stage of farm succession five years ago. As the enterprise recovers from drought, Melissa has plans to improve the productivity of the farm and her parents are keen to stick to the succession plan to allow them to retire as planned.

Melissa plans to apply for an AgriStarter Loan to progress towards owning a majority share of the farm business including land. Her parents will help guarantee the loan as per their succession plan. Melissa will be borrowing an equal amount from her bank to fund some of the property purchase and to invest in new infrastructure to increase the farm business’s efficiency and reduce operating costs.

Candice and Alex are currently working through farm succession with their parents and are looking to return home to start working with their parents. Fortunately, the current enterprise will be big enough to accommodate Candice and Alex with a viable property each, once their parents have retired. Their parents want to be sure that both children are committed and will be able to take over their own enterprise even though they have grown up on the farm.

Both Candice and Alex will take over a percentage of their parent’s bank debt and borrow the equivalent amount from the RIC to each buy 25 per cent of the trading entity and a portion of the property identified in the family succession plan. As Candice and Alex build their equity through reducing their current debts, they will be able to purchase more land and a share in the business.


Help and support

If you have questions about your loan:

Call us on 1800 875 675

Email us through our online contact form

The Rural Financial Counselling Service (RFCS) can help with your application.