Drought Loan
Help to prepare for, manage through, and recover from drought.
Purpose
Help to prepare for, manage through, and recover from drought.
Use this loan to:
-
Prepare for drought
Prepare for future droughts through measures including water efficiency techniques, accumulating feed reserves.
-
Fund drought management activities
Pay outstanding bills, pay for fodder or carting of water for livestock or produce.
-
Fund drought recovery activities
Contribute to the cost of drought recovery activities including planting and/or restocking (when seasonal conditions allow).
-
Refinance debt
Refinance certain existing debt at our low interest rate to improve cash flow.
Loan terms
$2m
Maximum amount
5.18%
Variable rate*
10
Year term
5
Years interest only
$0
Extra repayments
$0
Application Fee
$0
Early payout fee
No
Redraw
Percentage of total debt
At least 50% of your total debt must stay with a commercial lender.
Frequency of repayments
Tailored to the cash flow of the farm business.
Repayment structure
First 5 years interest only, then principal and interest for remainder of the 10 year term.
After 10 years, you can refinance any remaining balance with a commercial lender.
Full terms and conditions are available in the loan guidelines.
*Interest rate effective from August 2024 to January 2025.
Drought Loan information webinar
Watch a replay of our latest information webinar to learn how a RIC Drought Loan can support eligible farm businesses during challenging times.
Eligibility
Discover if a RIC loan is right for you, check your eligibility with our quick quiz.
Take our Drought Loan quick quiz
You
- are an Australian citizen or permanent resident
- contribute or plan to contribute at least 75% of your labour to the farm business(under normal circumstances)
- earn or plan to earn at least 50% of your income from the farm business (under normal circumstances)
- own or lease land and use it for farming purposes (includes agistment)
Your business
- is in financial need of a loan
- has the capacity to repay the loan
- is financially viable in the long term
- has existing commercial debt
- is in the agriculture, horticulture, pastoral, beekeeping (apiculture), or aquaculture industry
- undertakes all primary production aspects of the business wholly within Australia
- is registered for tax purposes in Australia with an ABN and is registered for GST
- operates as a sole trader, trust, partnership or private company
- is not under external administration or bankruptcy
You must
- have a drought management plan
- provide security for the loan
- secure the support of your commercial lender for the proposed loan
- repay the loan
You cannot use this loan for
- purchase of private and domestic assets
- payment of private and domestic expenses
- purchase of and/or investment in non-farm assets and payment of non-farm expenses
- paying out dividends
- reimbursement for depreciation of assets tax or other statutory payments
- your own labour costs
- anything that you have already received government funding for (except to refinance debt from previous concessional loans)
- any other non-eligible use listed in the loan guidelines
Eligible industries
The eligible primary production activities undertaken by a farm business to access RIC’s Farm Business loans, are those listed as part of the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (Revision 2.0) codes for agriculture and aquaculture, with some exceptions.
View the details of primary production activities identified in DIVISION A – AGRICULTURE, FORESTRY AND FISHING of the industry classifications.
Resources
Guidelines
We will assess your application against the criteria in the loan.
Read the detail on who can apply for a loan and what happens after you apply.
Document checklist
If applying online, follow the document checklist to ensure you submit a complete application.
Offline application form
We recommend you use the online application form.
Only use the offline form if you prefer to submit your application by email or post.
Complete this form on your computer, or print and fill it in by hand using a black or blue ink pen only.
- Right click on the link and select 'save target as' or 'save link as' to download the form.
- Open the form using Acrobat Reader. Download a free version of Adobe Acrobat Reader DC software.
- Save the application form regularly as you are filling it in.
- The form will not work when opened in a web browser or other software, e.g. Microsoft Edge, Chrome, Safari, Preview.
Drought management plan
You must include a drought management plan with your application.
Your plan must outline how you will use the loan to prepare for, manage through or recover from drought.
You can either:
- attach your own plan to your application
- use the template included in the application form
- use the standalone template
Guidelines
We will assess your application against the criteria in the loan.
Read the detail on who can apply for a loan and what happens after you apply.
Document checklist
If applying online, follow the document checklist to ensure you submit a complete application.
Offline application form
We recommend you use the online application form.
Only use the offline form if you prefer to submit your application by email or post.
Complete this form on your computer, or print and fill it in by hand using a black or blue ink pen only.
- Right click on the link and select 'save target as' or 'save link as' to download the form.
- Open the form using Acrobat Reader. Download a free version of Adobe Acrobat Reader DC software.
- Save the application form regularly as you are filling it in.
- The form will not work when opened in a web browser or other software, e.g. Microsoft Edge, Chrome, Safari, Preview.
Drought management plan
You must include a drought management plan with your application.
Your plan must outline how you will use the loan to prepare for, manage through or recover from drought.
You can either:
- attach your own plan to your application
- use the template included in the application form
- use the standalone template
Interested in a Drought Loan?
Explore our educational toolkit to help you understand if you are eligible for a RIC loan.
Ready to start a RIC loan application?
Check what you need before starting an application, download helpful resources and apply for a RIC loan.
Ask a question
Get in touch if you have a question about the Drought Loan.