Regional Investment Corporation (RIC) interest free Drought loans

Earlier this year the Government announced changes to the Drought loan scheme.

The biggest change is the enhancement of Drought loan terms to offer 2 years interest-free, 3 years interest only and 5 years principal and interest.

These loans are for amounts of up to $2 million.

Key points:

  • Drought loans are available for farmers to feed, water, freight, restock, refinance, or anything that might keep their operation going
  • All Drought loan applicants, including existing Drought loan customers, will be able to enjoy the two-year interest-free period from 1 January 2020
  • Small business Drought loans also available

Announced as an enhancement, we believe RIC interest-free Drought loans are worth looking at, because more applicants than not are eligible. And there are several ways to get the ball rolling.

It is possible to work through an interest-free Drought loan application yourself, but it can pay to work with Salisbury Accountants & Business Advisors to discuss the process and decide how much of our input might be required before you set out to do one.

The key is NOT TO self-assess

You don’t want to incorrectly rule yourself out

Salisburys can provide light assistance right through to full project management services, including being your ‘Application Nominee’ point of contact for agency enquiries during the process.

Once an application commences, applicants are assigned a one-time key. Some clients like to involve Salisburys as their Application Nominee by handing over their key so we can contribute to their application by providing the SWOT[1] Analysis, factors affecting the farm operation now and in the future and budgets.

Salisburys can also sense-check overall applications prior to submitting. Once an application is submitted, no further changes can be made, however there is a right of appeal which may require an extra set of accounts to be prepared – extra insight that the Salisbury Team has thanks to their RIC interest-free Drought loans team brains trust.

What are the benefits?

During prolonged periods of drought and the hardship that goes with it, RIC interest-free Drought loans cover farmers’ income in the absence of rain.

If you don’t have a go, the answer is ‘no’

Before you embark on an application, check the information you will need to provide as a common cause of loan assessment delay is missing information.

Talk with your commercial lender. Let them know that you plan to apply for a RIC loan and then gather the required information. An application cannot be assessed until all your information has been received, including attachments of rates notice, bank statements, water rights, tax returns, property titles, proof of identity (100 points) and other important documents at the date of claim (if older documents are submitted it can be a point of rejection, but you usually have 14 days to respond).

In some cases, it can be easier to go into Centrelink first thing with everything you need and just wait it out. Nothing happens until everything is supplied, especially personal papers such as bank account statements and credit card statements.

The good news is that the Salisbury Team can provide the latest tax returns and current financial year Profit & Loss reports so we make it easy to organise those as well as any additional forms for trusts or companies.

Agencies are allocating a lot of resource to managing successful applicants with follow up and support. The downside is that income has to be reported every fortnight which can be challenging in primary production, but it’s their way of avoiding potential overpayments.

Salisburys project management ensures you’re on track to get an application over the line and funds in the bank.

We have to know each client to be successful and that’s what we do. Our Client Managers collaborate across our whole team’s expertise and play to our strengths.

Salisburys is across all the programs currently available which means we can pinpoint suitable assistance for our primary producers.

While it’s on offer, take it now because you don’t know how long it’s going to last. Our Client Managers can start you off and get you going.

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[1] SWOT = Strengths, Weaknesses, Opportunities, Threats