Regional Investment Corporation – Drought Loans

This program aims to support the long-term strength, resilience and profitability of Australian farm businesses. It helps eligible farm businesses continue to manage through drought conditions, recover once the season breaks and prepare for future droughts.

Loans of up to $2 million are available. The loan term is ten years, with interest-only repayments for the first five years and principal and interest repayments for the final five years. At the end of the loan term, the farm business will need to refinance the remaining loan balance.

The variable interest rate is reviewed every six months and new rates (should there be any changes) come into effect in February and August each year. The current is ​1.92%.

A total funding pool of $250 million is available each year until 30 June 2026. On 19 August 2018, the government announced it is increasing the total amount available for these loans to $500 million in any one year.

On 21 November 2019, the Government has announced changes to the drought loan:
- The current terms will be enhanced to offer two years interest free, three years interest only and five years principal and interest. These loans are for amounts of up to $2 million.
- The revised drought loans are available for farmers to feed, water, freight, restock, refinance, or anything that might keep their operation going.
- Those who already have finance will benefit from the changes and RIC will notify them of what this process will be. They will be notified when the change becomes active.
- Existing loans are still current, only the conditions in the loan agreement will be amended, and so there is no need to re-assess eligibility.

RIC is working to develop the policy in order to deliver these loans as soon as possible.

Eligible applicants must:
- Have the capacity to repay the loan.
- Be able to provide sufficient and satisfactory security acceptable to Regional Investment Corporation.
- Have existing commercial debt and secure the support of its commercial lender for the proposed Regional Investment Corporation loan.
- Be involved within the agricultural, horticultural, pastoral, apicultural or aquacultural industries.
- Undertake all primary production aspects of the business wholly within Australia.
- Operate as a sole trader, partnership, trust or private company.
- Be registered for tax purposes in Australia with an ABN and be registered for GST.
- Not be under external administration or bankruptcy.

Eligible farm businesses must meet the following eligibility criteria:
- Be located in an eligible area.
- Have a drought management plan.
- Be in financial need of a loan.
- Be financially viable in the long term.
- Have existing commercial debt.
- Meet the eligibility criteria in the Guidelines.

Please refer to the Guidelines for the complete eligibility requirements.

Eligible uses of loans include:
- Refinancing (restructuring existing debt)
- New debt for operating expenses and capital expenditure
- Drought management activities
- Drought-recovery activities
- Drought preparedness activities

Please refer to the Guidelines for the complete list of eligible and non-eligible loan uses.