RADIO TRANSCRIPT: RIC CEO JOHN HOWARD SPEAKING TO ABC’S SELINA GREEN ON ABC SOUTH AUSTRALIA COUNTRY HOUR PROGRAM ABOUT THE NEW RIC MARINE RECOVERY LOAN APPLICATIONS NOW OPEN.
SELINA GREEN: Well, commercial fishers under financial strain due to South Australia's harmful algal bloom can now access new low interest loans have been announced by the Federal Government. The Marine Recovery loan is what they're called. They're a new loan product being offered by the government's farm business lender, the Regional Investment Corporation or RIC as we better know it. It's loaned billions of dollars to farmers already in times of drought and natural disasters. But the government announced changes to RIC late last year to allow it to offer new concessional loans for fishers and those in aquaculture businesses who've been hit hard by marine heat waves and harmful algal blooms. RIC Chief Executive Officer John Howard told me that these loans are now available.
JOHN HOWARD: So, part of the Federal Government's response to the marine algal bloom event in South Australia was the announcement of a concessional loan product to be delivered by RIC and I’m pleased to announce that that product went live on Wednesday, the 6th May.
SELINA GREEN: This is a South Australian-specific loan product.
JOHN HOWARD: Yes, it's for those that are aquaculture and wild catch fishing businesses that are able to demonstrate that they've had a reduction in their business turnover and as a result of that marine harmful algal bloom event.
SELINA GREEN: Talk us through the product. What's available in terms of how much people can borrow over what sort of time period, and what they can use it for?
JOHN HOWARD: Yeah, sure. It's called a Marine Recovery Loan. So, those that are eligible can borrow up to $250,000. It's a 10-year loan term. The first five years of that will be interest-only payments, with the second five years being principal and interest. The beauty of our product or the attraction of this product is the concessional nature of the interest rate that is currently at 5.18 per cent, that is reviewed every six months.
SELINA GREEN. So, that is a set interest rate that applies to all of the RIC's loan products?
JOHN HOWARD: That is, yes.
SELINA GREEN: Now, in terms of what that loan can be utilised for, are there set rules around what it can be utilised for?
JOHN HOWARD: There is, but it is reasonably open. So, the loan can be used to refinance existing debt and make use of the lower interest rate to help improve their cash flows. Or people can use the loan to pay business operating expenses, you know, including paying suppliers, salaries, wages, rent, interest and fuel. Or it can be used for capital expenditure to help acquire or upgrade or maintain some of the long term business assets. So, there's a range of uses that are there, everything from refinancing their existing debt through to the payment of operating expenses.
SELINA GREEN: And what's the process of determining if someone or a business is eligible has met the criteria for this loan?
JOHN HOWARD: So, the main one is that the affected business must be an authorised aquaculture or wild catch fishing business and that the affected business must show and provide evidence that there's been a material reduction in the business turnover because of the marine algal bloom event that's been experienced in South Australia. Some of the other key eligibility requirements is the business must have commercial debt. We can't be more than half of their debt profile. They must be able to demonstrate that they're able to repay the loan and provide added security to be placed against that loan.
SELINA GREEN: This is, as you say, a new loan product. So, you've not offered one like this before. But do you have any expectation about the kind of demand that you're going to get?
JOHN HOWARD: There's definitely been a long-experienced event with a lot of industry, aquaculture and wild catch fishing businesses that have been impacted by that event. So, what we're encouraging is any of those people that fit that criteria, please reach out to us. The concessional nature of the loan provides a great avenue for minimising cash outflows in that interest expense. So, please reach out and really don't self-assess. Go to our website, there's all the details there on eligibility criteria. There's information to reach out to our contact centre. So, we'll be able to help you through anyone with queries to answer some of those questions. There's plenty of information on how to apply, so please reach out if you think you will be able to meet that eligibility criteria. Ask the questions, and we're here to help.
SELINA GREEN: Do you have a set goal or target for how quickly you'll assess these applications and get those loans rolling?
JOHN HOWARD: Don't have a set target, but we're very aware of the need and the situation that people are in to expedite that as much as possible. And I think one of the things that we really encourage to help expedite that process is because you must have commercial debt and therefore you've got a loan arrangement with your bank or other provider that would already have access to that security to support their loans. Reach out to them in advance because you're going to need their approval. Also, seek any financial advice to make sure that this product is appropriate for you. Go to our website, you'll see all the information that has to be provided and the more of those that are in place up front, the quicker and easier the whole process will be.
SELINA GREEN: John, this is on top of the usual farm drought debt loans that you've been that the RIC has had available for some time now. Are you continuing to see strong demand for those loans?
JOHN HOWARD: Absolutely, yes. We're excited to have announced, back at the end of March, the release of another new loan product, the Drought Hardship Loan, to support our long-standing drought loan. We've seen an uptake in significant interest from South Australia, Victoria, southern NSW. So, those areas that have probably seen two years of drought conditions for that new loan product. So, as an organisation, we've got a broader range of products now to help people through those hard times. So, I encourage people, please go to our website, ric.gov.au. and have a look. There's a range of products there that might be suitable to help you through the hard times.
SELINA GREEN: That's John Howard there, he's the Chief Executive Officer of RIC, the Regional Investment Corporation. If you want more information on the Marine Recovery Loan, which is now available, go to the RIC website.
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