Government extends $2m loan lifeline for drought affected farmers

The Federal Government has extended its two-year interest free loan program available to drought affected farmers, small businesses and rural towns.

Provided through the Regional Investment Corporation (RIC), the loans are up to $2m, with a ten year term. The first five years are interest only, then principal and interest for remainder of the 10 year term. There is a variable interest rate over the final five years, cited at 3.11 per cent.

After 10 years, farmers can refinance any remaining balance with a commercial lender.

Minister for Agriculture Bridget McKenzie said a new loans program for small businesses and making existing drought loans interest free for two years would deliver immediate support for everything from buying fodder to transporting stock and existing cattle through to paying staff and purchasing new equipment. The Regional Investment Corporation’s mandate sets its interest rate just to cover administration and borrowing costs.

“These loans mean farmers and small business owners can do what they need to, right now at zero cost,” Minister McKenzie said.

“Farmers will not have to pay a cent for the next two years and we’ll keep assessing the program if the drought runs longer than that to ensure repayments are affordable.

“With $200 million worth of loans committed already, we estimate the new small business program and the changes to the Drought Loans for farms will see around $1.2 billion issued over the next three years that they can put to their priorities.”

The Prime Minister said the Coalition Government’s next step of measures to combat the drought’s impact was ready to flow.

The Commonwealth Government has also released its Drought Response, Resilience and Preparedness Plan , drawing on the Drought Co-ordinator Major General Stephen Day’s report.