Small businesses supplying drought-affected farm businesses can apply for financial relief from today, with loan applications now open for the Regional Investment Corporation’s (RIC) new AgBiz Drought loan.
The loans for up to $500,000 over 10 years have two years interest free and no repayments, followed by three years interest only repayments, then five years principal and interest repayments.
Eligible small businesses are those that directly provide primary production related goods and services to farm businesses in drought. Examples of eligible small businesses could include harvesting and fencing contractors, stock and station agents, and businesses dealing in agricultural equipment and repairs.
RIC CEO Bruce King said the AgBiz Drought loan is designed to improve the long-term strength, resilience and profitability of small businesses that supply fam business through refinancing existing debt and working capital.
“To be eligible, a small business needs to demonstrate that their financial situation has been affected by the drought and that they’re financially viable in the long-term.
“It’s not about increasing the industry debt burden, but an opportunity to refinance existing debt with no initial repayments for two years to provide breathing space to manage through the drought.
“The RIC has received a significant response to its existing Drought loan launched in July 2018 for drought-affected farmers, particularly following the introduction of the two-year interest free period that came into effect on 1 January 2020 with 190 drought loans valued at approximately $173 million already approved this financial year,” said Mr King.
The AgBiz Drought loan represents the first RIC product offered to small businesses in the agriculture sector. Previously only farm businesses have been eligible.
About the Regional Investment Corporation
The Regional Investment Corporation (RIC) is a Government-backed specialist finance provider for farmers and small businesses that supply the agriculture sector. For the financial year to 31 December 2019, the RIC had approved 209 loans valued at approximately $230 million.