A FEDERAL Government-run agricultural business lender has announced the variable interest rate on concessional farm business loans will remain at 5.18 per cent for the foreseeable future.
Australian Government farm business lender RIC – short for Regional Investment Corporation – announced the variable interest rate would be effective from 1 February 2025 for six months until the next review period.
RIC chief executive officer John Howard said RIC’s low interest rates continue to provide a concessional benefit to farm businesses in financial need.
“RIC concessional interest rates will stay the same which is welcome news for thousands of RIC farm business loan customers across Australia, providing much-needed breathing space, greater certainty to manage cash flow, and stability to strengthen their long-term financial position,” he said.
“Our RIC Farm Loans Customer Insights Brief 2024 revealed that high interest rates and farm production costs remain the biggest concerns for farmers.
“RIC low-cost loans continue to provide a concessional benefit to help ease that cost pressure.
“One of the key benefits of RIC loans is interest rates are only reviewed every six months and are based on the average of the Australian Government 10-year bond rate, not Reserve Bank of Australia cash rate movements.
RIC loans have a 10-year term with interest-only repayments for the first five years, followed by principal and interest repayments for the remainder of the loan term. Farm businesses can borrow up to $2 million.
Farm-related small businesses can borrow up to half a million dollars. Eligibility and assessment criteria apply.
“Since the start-up of RIC in July 2018, RIC concessional loans have saved our customers an estimated $307 million in interest repayments,” Mr Howard said.
