The Regional Investment Corporation (RIC) said its AgriStarter Loan is helping first-generation and next-generation farm businesses start, set up, and grow.
According to RIC, its commitment to the growth of the Australian agriculture industry has resulted in about $40 million in AgriStarter loans.
“Our goal is to make it easier for farmers to access low-cost, fee-free loans to secure their farm business and become prosperous sooner,” RIC Chief Executive Officer John Howard said.
Howard explained that the loan can be used to launch and grow a first farming business, to start or expand a share farm or farm leasing business, or to help with succession planning for the intergenerational transfer of farm business assets.
Two-thirds of AgriStarter loans have aided in the acceleration of business operations to assist first farmers, with the balance assisting in succession planning.
“AgriStarter offers financial ‘breathing space’ for new farmers with minimum of 3 years on-farm experience to improve cash-flow, refinance debt or implement succession plans to fast-track their business growth and productivity,” Howard said.
“As a key investment vehicle on behalf of the Australian Government, the RIC team provides a valuable role as a partner to Australian agriculture and enabler of growth in regional communities,” he added.
Scott Carter, a RIC client and berry grower, said his AgriStarter Loan provided a road into farm business ownership and advised other young farmers to explore it as an alternative.
“The loan terms are ideal for start-up farm businesses like mine which may take some time and funds to invest in infrastructure, livestock or produce before we are able to gain a return,” Carter stated.
The loan was created expressly to help the growth and development of agricultural enterprises in Australia, and it offers a five-year interest-only credit with low-interest rates and no application costs, allowing farmers to focus on creating and growing their businesses.
Carter stated that many new farmers will spend money for the first 18 months before they begin to bring money in.
“The RIC loan is interest-only [repayments] for five years and then you start paying principal back for the next five years. That helps your cash flow immensely in that first five years when you’re setting up,” he said.
RIC variable interest rates are established by the 10-year Australian Government bond rate and are only reviewed twice a year, making them more stable than a commercial loan and allowing business owners to better manage their cash flow in order to flourish and expand.
