Australian Government farm business lender, RIC (Regional Investment Corporation) today announced the variable interest rate on all concessional farm business loans including AgriStarter, Farm Investment, Drought, and AgBiz Drought, will increase by 47 basis points to 4.99 per cent effective from 1 February 2024. The Plantation Loan will increase to 4.54 per cent.
RIC Chief Executive Officer John Howard said RIC concessional loans play a vital role in strengthening Australian agriculture and helping farm businesses manage their risk.
“This is the first time in 12 months RIC interest rates have changed. Since RIC’s last rate rise on 1 February 2023, the RBA cash rate has increased by 1.25 per cent,” said Mr Howard.
“In the context of rising capital costs, and dropping commodity prices in the later part of 2023, it’s reassuring to be able to provide our customers with a concession loan product and some certainty in managing their finances. One of the key benefits of RIC loans is interest rates are reviewed every 6 months and are based on the average of the Australian Government 10-year bond rate, not Reserve Bank of Australia (RBA) cash rate movements. We are pleased RIC loan interest rates continue to provide a significant concessional benefit to farm businesses in financial need.”
Mr Howard said, “RIC loans have saved our customers an estimated $268.47 million in interest repayments in since RIC started in July 2018. Our latest research shows 4 out of 5 RIC loan customers have greater confidence in the future and profitability of their farm business*.
“Increasing agribusiness commercial interest rates, unpredictable weather patterns and volatile markets are driving greater need for our low-interest loans. Application volumes are up 32 per cent in the first half of this financial year, compared with the same period the year prior. For the remaining six months of this financial year, there is around $161 million in loan funding available.
"We are pleased to help farm businesses set up, invest, recover, and prepare for potential severe business disruption including drought, floods or bushfires for a more sustainable, thriving regional Australia,” he said.
RIC interest rates are variable and reviewed every six months, bringing certainty to RIC customers that any change will be effective on 1 February and 1 August each year. Farm businesses with a concessional RIC loan benefit from no application fees, no ongoing management fees and no extra or early repayment fees. RIC loans have a 10-year term with interest-only repayments for the first five years, followed by principal and interest repayments for the remainder of the loan term. Eligibility and assessment criteria apply.
Read more on RIC loans here.
*RIC Farm Loans Customer Insights Report 2023 is based on online independent research completed by JWS Research in July 2023 using 504 responses from existing RIC customers.
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RIC (Regional Investment Corporation) is an Australian Government farm business lender providing low-interest loans for farmers and farm-related small businesses in financial need to strengthen Australian agriculture. RIC loans can be used for management, recovery and future proofing following severe business disruption due to drought, natural disasters, biosecurity issues or other significant market events. RIC loans can also help farm businesses to establish farm businesses for first generation farmers or succession planning for next generation farmers. RIC’s vision is to build thriving regional communities. Since start-up on 1 July 2018, RIC has settled 3009 loans valued at more than $3.24 billion as at 31 December 2023.