RIC Announces Variable Interest Rate Adjustment for Farm Business Loans

Regional Investment Corporation (RIC), the Australian Government’s farm business lender, has revealed changes to the variable interest rates on concessional farm business loans, effective from 1 February 2024.

In a statement released today, RIC CEO John Howard announced that 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%. Additionally, the Plantation Loan will see an increase to 4.54%.

Howard emphasised the crucial role of RIC concessional loans in supporting Australian agriculture and aiding farm businesses in managing their financial risks. He noted that this adjustment marks the first change in RIC interest rates in 12 months, attributing the increase to a rise in capital costs and declining commodity prices throughout 2023.

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Despite this, Howard highlighted the ongoing benefit of RIC loans, which are reviewed every six months based on the average of the Australian Government 10-year bond rate, providing certainty to farm businesses in financial need.

RIC Farm Business Loans Customers.

According to Howard, RIC loans have saved customers an estimated $268.47 million in interest repayments since the corporation’s inception in July 2018. Recent research indicates that 4 out of 5 RIC loan customers express increased confidence in the future profitability of their farm businesses.

The CEO noted a significant surge in loan application volumes, up 32% in the first half of the current financial year compared to the previous year. With approximately $161 million in loan funding available for the remaining six months of the financial year, RIC aims to assist farm businesses in establishing, investing, recovering, and preparing for potential disruptions such as droughts, floods, or bushfires.

RIC interest rates remain variable and are reviewed every six months, ensuring that any adjustments take effect on 1 February and 1 August each year. Concessional RIC loan customers benefit from no application fees, no ongoing management fees, and no extra or early repayment fees. The 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 term.

For further details on RIC loans, interested parties are encouraged to visit here.

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