Farmers encouraged to get prepared for assistance during September

Interest-free drought loan applications end soon

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Drought loan schemes can help farmers prepare for, manage and recover from drought.

Drought loan schemes can help farmers prepare for, manage and recover from drought.

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Interest-free terms for drought loans are about to change, so submit an application during September.

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Key points:

  • Drought Loans can be used to refinance existing debt, fund activities such as replanting and restocking or help cover operating expenses.
  • AgBiz Drought Loans help small agriculture-dependent businesses manage through drought.
  • Two-year, interest free terms for Drought Loans and AgBiz Drought Loans end on September 30.
  • From October 1, loan terms will have a five-year interest-only period - then principal and interest apply for the rest of the 10-year term.

Farmers and farm-related small businesses have until September 30 to apply for two-year interest-free loans from the Regional Investment Corporation (RIC), before the drought-related loan terms change.

Minister for Agriculture, Drought and Emergency Management, David Littleproud, said now was the time for farmers and farm-related small business to submit their loan applications to qualify for the interest-free period.

"There are just two weeks left to submit a completed loan application and provide supporting documentation to qualify for the interest-free period," he said.

"Drought loans have been critical in helping farmers and small businesses facing hardship due to the drought.

"These assist farmers prepare for, manage and recover from drought, and can be used to refinance existing debt, fund activities such as replanting and restocking and operating expenses."

Mr Littleproud said AgBiz Drought Loans assisted small agriculture-dependent businesses manage through drought.

He said these loans could help with refinancing existing debt, or paying for operating expenses.

For Drought and AgBiz Drought loan applications made after October 1, the terms will revert to five years' interest-only and five years' principal and interest.

"The Government announced the two-year interest-free terms for these loans in November last year in response to the severe drought conditions that were being experienced in many parts of the country," Mr Littleproud said.

"I understand that parts of Australia are still experiencing drought, and it will also take a number of years to recover.

The variable interest rate for Drought and AgBiz Drought Loans has dropped to 1.92 per cent - effective August 1, 2020.

The variable interest rate for farming loans is at a record low for the RIC and provides valuable savings with interest repayments, according to Mr Littleproud.

"I encourage farmers and small businesses to get their application in by 30 September 2020 if they want to receive the benefit of the two-year interest-free period," he said.

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