The Regional Investment Corporation’s (RIC) variable interest rate on its Farm Investment loan dropped by 1 per cent to 2.11 from 3.11 per cent and its Water Infrastructure loan rate to 1.65 from 2.65 per cent, effective 1 February 2020, providing even cheaper finance for farming and water.
RIC CEO Bruce King said the interest rate drop has made an affordable finance option even more affordable for farmers to strengthen their businesses, including investing in expanding their markets and for state and territory governments investing in water infrastructure.
“The new 2.11% Farm Investment loan variable interest rate represents an additional saving of $50,000 compared to the previous interest rate over the loan product’s five-year interest only period on a $1 million loan.
“Compared to the average commercial lending rate between 4 to 6 per cent, the savings are even more significant at up to $200,000 back in farmer’s pockets over the five-year interest free period.
“Our Water Infrastructure loan is also available to state and territory governments to enhance water security and provide affordable water. We’d encourage governments looking at supporting regional economic growth through water infrastructure to contact the RIC.
“This rate drop highlights the RIC’s commitment to provide cost effective funding solutions to farmers, graziers and their businesses as they recover from this drought and propel their businesses forward,” said Mr King.
The variable interest rate does not apply to the RIC’s drought loans for farmers and farm-related small businesses (AgBiz Drought loan) and the AgRebuild loan for last year’s North Queensland floods, as they’re currently subject to a two-year interest free period from 1 January 2020.
The RIC’s variable interest rate is linked to the 10-year bond rate and is reviewed bi-annually. The rate is set at a level that covers the cost to the government of raising the loan capital and the RIC operating costs.
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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. Since its inception on 1 July 2018, the RIC had approved $387 million in loans as at 31 December 2019. For more information visit www.ric.gov.au