Australian Government farm business lender, RIC (Regional Investment Corporation) today announced the variable interest rate on all concessional farm business loans will increase by 19 basis points to 5.18% effective from 1 August 2024.
RIC Chief Executive Officer John Howard said RIC's low interest rates continue to provide a concessional benefit to farm businesses in financial need.
"This past financial year, RIC delivered more than $200 million in low-cost loans 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," Mr Howard said.
"In the last 18 months RIC's variable interest rate has been reviewed three times and changed twice, increasing by 0.66% over that period."
Mr Howard said RIC interest rates are only reviewed twice a year bringing some certainty to RIC customers in planning their financial forecasts.
"One of the key benefits of RIC loans is interest rates are reviewed every six months and are based on the average of the Australian Government 10-year bond rate, not Reserve Bank of Australia (RBA) cash rate movements," Mr Howard said.
"This brings certainty to RIC customers when managing their cash flow in that they know any change will be effective on 1 February and 1 August each year.
"Since the start-up of RIC in July 2018, RIC concessional loans have saved our customers an estimated $307 million in interest repayments," Mr Howard said.
The new variable interest rate of 5.18% is effective 1 August 2024 and applies to all RIC farm business loans such as, AgriStarter, Farm Investment, Drought, and AgBiz Drought.
Farm businesses with a concessional RIC loan benefit from no application fees, no ongoing management fees, and no penalty fees for extra or early repayment.
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. Farm businesses can borrow up to $2 million. Farm-related small businesses can borrow up to half a million dollars. Eligibility and assessment criteria apply.
