Regional Investment Corporation – AgBiz Drought Loans

This program aims to help eligible drought-affected small businesses that supply primary production related goods or services to farm businesses in affected areas to mitigate the effects of drought on their businesses.

The features of the loan are:
- Amount: Up to $500,000. There is no minimum loan value.
- Term and repayments: Ten years, with interest-only repayments for the first five years and principal and interest repayments for the final five years.
- Interest rate: 1.77% variable rate. Any interest rate change will be effective from 1 February and/or 1 August each year, as applicable.
- Percentage of total debt: At least 50% of the total debt must stay with a commercial lender.
- Frequency of repayments: Tailored to the cash flow of the small business.

The structure of principal repayments will be dependent upon a number of key factors, including the loan amount, the purpose of the funding and the nature of the security. The principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without incurring a fee.

Loan offers will be subject to the availability of funds and will be made at RIC's discretion. If the funding allocation is fully committed, no further applications will be considered.

Eligible applicants include small businesses that must:
- Be in financial need of a concessional loan as a consequence of drought affecting farm businesses in an affected area. There must have been:
a) A material reduction in the turnover of the small business.
b) A material increase in unsecured debts to the small business by farm businesses.
- Owe commercial debt.
- Throughout the six months before applying for the loan have fewer than 20 employees other than casual employees.
- Be assessed by us as financially viable, or having sound prospects of a return to financial viability within the term of the loan.
- Be assessed by us as having the capacity to repay the loan.
- Provide sufficient security for the loan.
- Be carried on by:
a) A sole trader who is an Australian citizen or permanent resident.
b) A partnership, where at least one of the partners is an Australian citizen or permanent resident.
c) A trust, where at least one of whose beneficiaries or unit-holders is an Australian citizen or permanent resident.
d) A corporation (within the meaning of the Corporations Act 2001(Cth)) other than a public company (within the meaning of that Act), at least one of whose members is an Australian citizen or permanent resident.
- Have at least one member of your small business, under normal circumstances, contributing at least 75% of their labour and derives at least 50% of their income from the small business.
- Be registered for tax purposes in Australia with an ABN and be registered for GST.
- Not be under external administration or bankruptcy.

Please refer to the Guidelines for the complete eligibility requirements.

Eligible loan uses include:
- Working capital required to help small businesses manage their businesses through the drought.
- Refinancing (restructuring existing commercial debt).
- A combination of both.

Please refer to the Guidelines for the complete list of eligible and ineligible activities.