Farmers and farm-related small businesses will have even more financial breathing space with the variable interest rate to fall again on Regional Investment Corporation (RIC) loans from 1 February 2021.
AgriStarter Loan and Farm Investment Loan borrowers, as well as those who submitted their Drought and AgBiz Drought loan applications after the interest-free terms ended on 30 September 2020, will have their interest rates reduced from 1.92 per cent to 1.77 per cent.
RIC Chief Executive Officer Bruce King said customers will benefit from the falling interest rate and hopes they may be able to reinvest the savings back into their businesses, particularly those still managing through or recovering from drought.
“The RIC is here to help farmers and farm-related small businesses in financial need of a concessional loan, and we’re pleased to see the RIC’s variable interest rate fall to another record low,” said Mr King.
“The five years’ interest-only terms on our loans can assist our customers to invest in their businesses to either recover more effectively from recent tough drought conditions, expand and explore new markets or establish a new farm business.”
RIC loans currently offer five years’ interest only and five years’ principal and interest payments over 10 years, with an option to refinance the remainder with the customer’s commercial lender at the end of the loan term.
The variable interest rate dropped in August 2020 from 2.11 to 1.92 per cent and will now be an even lower 1.77 per cent from 1 February 2021, a historical low for the RIC.
Customers who have qualified for the interest-free period on the drought-related and AgRebuild loans will continue with their approved terms. The RIC’s variable interest rate is reviewed biannually and is linked to the 10-year Commonwealth bond rate.
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About the Regional Investment Corporation
The Regional Investment Corporation (RIC) is a federal government-backed specialist finance provider for farmers and farm-related small businesses. For the financial year to 31 December 2020, the RIC has approved more than 830 loans valued at more than $865 million.
With process improvements and increased staff, the RIC has already approved more loans this financial year than all of the previous financial year. Since its inception on 1 July 2018, the RIC has approved more than 1600 total loans valued at more than $1.75 billion as at 31 December 2020.