This webinar will begin on Wednesday November 21 at 1.00pm AEDST, 12.30pm ACDT, 12.00pm AEST, 11.20am ACST, and 11.00am AWST.
Please ask any questions to the RIC staff in our live Q&A chat under the webinar. Matt Ryan (Interim CEO of the Regional Investment Corporation) will be accompanied on the webinar and be available for answering questions along with Chris Langridge, A/g Director Farm Loans Policy, Liz Rodway A/g Communications Manager.
Thanks everyone for joining.
If you would like a transcript of the webinar and were not registered, just register via first green box at https://ag.farmtable.com.au/ric-webinar
Hi I asked to question earlier about interest-free and was advised The answe was interest ONLY. I am currently looking at a report from the ABC in Oct. definitely sign five years interest FREE. Yes the ABC could have made a mistake in the reporting. Please qualify that there was NEVER an interst FREE (for 5 years) option/offer.
I believe said the presenter said the loans were for 10 years. Can they be repaid earlier, with the applicable interest savings
I can confirm our loans are not interest free. Can you share the link with me as that is wrong. Unless you’re talking about a NSW government loan?
These NSW Drought Assistance loans of up to $50,000 are interest-free so there may have been confusion with them -> https://www.raa.nsw.gov.au/assistance/drought-assistance-fund
So- do you have to be drought affected …. a series of poor years leaves lots of farmers struggling, with no real hard data as in a ‘drought’ to show for ’cause’.
Our loans aren’t based on ‘drought declarations’ (i.e. hard data) – we can look more flexibly at the impacts on your business. You just need to show 2 years of ‘significant financial impact’. There’s more detail on this in our guidelines. Or you can call us on 1800 875675 to discuss.
Thanks everyone for joining. If you would like a transcript of the webinar and were not registered, just register via first green box at https://ag.farmtable.com.au/ric-webinar
Matt – you mention the Farm Water Infrastructure scheme. In WA our ‘Water Grants for farmers was cancelled n May of this year. Does this mean it is available under a different name or ???
G’day Catherine, our farm loans can be used for farm water infrastructure, I think the older schemes you refer to maybe state based products, we are federal and cover all of Australia
Thank you everyone for your questions – they’ve been fantastic. Appreciate its a busy time for a lot of you.
Yes, thanks everyone, hope it was helpful
Thankyou Matt, yes most helpful.
Any final questions? We will take questions until 2.10pm.
In having an application assessed, is it just one assessor and therefore contact with applicant if there are questions or more information required?
Once we have all the information we need, It’s just one assessor and they will be in touch to discuss your application.
Good to know
Thank you all for your questions and involvement today.
The RIC team will be online for another 5 minutes to finish answering any unanswered questions and any last minute ones.
How long does it take for the RAA to ring you back about a loan enquiry? I was told when I contacted the RAA hotline that someone relevant to answer my questions would call me back within 3 business days, this was over 2 months ago?
Hi there – RAA is Rural Assistance Authority in NSW. Is that who you are talking about? Are you sure you called us?
Hi Liz, yes I called the Rural Assistance Authority in Orange. I used the phone number listed on the RAA website. It was midday on a Friday & the girl I spoke to said someone would call me back within 3 business days.
G’day again – I appreciate it can be confusing there are a lot of different organisations out there helping farmers. You can call us on 1800 875 675. We are the Regional Investment Corporation and our address is http://www.ric.gov.au.
Hello which loan do I need if I’m drought affected and want to refinance existing land loans – is it the drought loan or the other one?
Hi there! If you’re in eligible area (the map is on our website) then I would suggest you go with that one. If not, look at the farm investment loan – you just need to show you are trading commodities interstate or overseas. The rest of the eligibility criteria is roughly the same. Both loans can be used for drought related activities.
Excellent thank you Liz we are definitely in an eligible area.
whats the maximum equity level you will loan up too?
Hi MHH1 -thanks for your question. The maximum lending against a farm property is 70%. Does that help?
Most Banks will only loan up to 40%? So you can be at maximum equity at the Bank but still get further finance from the RIC loan?
In that scenario, yes. Does seem unusual though?
A drought management plan??? Is there a template – what does this look like? I suspect what you need is already in our business plan, but would that format be suitable?
Hi Simone, We only require a very short and simple drought management plan. If you already have something ‘off the shelf’ in your business plan, then is a section embedded in the application form (three quick questions) that you can complete.
Thanks.
Just had a quick look, seems I have most covered in my BAU docs – a few value adds there though which are always useful. Many thanks
I’ve been told by a RFCS if you apply for any of the government concessional loans, your bank may not look after you as well in the future because you have taken business away from them. Is this true? If so, is there any policy in place to stop this from happening?
G’day Big Green Tractor, I can’t really speak about what banks might or might not do, I see the RIC as partnering with the farmer and existing lender to help them through a tough period, I am hopeful banks can also see the benefit for all parties
Our bank encouraged us to take out RAA loans post flooding as it was helpful to our business through the recovery and therefore valuable to them as it ensured our sustainability as a business into the future and thus ability to repay.
Thanks for your reply Matt. I hope you are right & it won’t affect a client’s’ customer margin if you need to apply for one of these loans.
I am not aware of any specific policy relating to RIC, I know there is a increased awareness of bank conduct currently due to the royal commission
If anyone has live chatted to a RIC staff member in the green chat box, it is best to comment on this thread please for ease of response. Please only use if your question is private in nature.
Wrote a thesis to Matt in a private message. About commercial lenders and it being partnership, didn’t finish it, and it cut me off. Can that be viewed ?
Hi Darren, we are just trying to recover it in the back end as Matt having trouble reading it in PM format. Are you happy if we post it on the main thread when recovered?
Hi Darren, here it is if you want to finish it.
Gday Matt, I’m currently listening to your webinar. Some very interesting information. Well communicated. I am a currently a third generation primary producer, which through our family succession strategy we sold our family assets to allow partners to presue their own interests. I am very interested in purchasing a rural property of my own in the coming 12 months, however I note you only finance up to 50% of the debt with the remaining 50 with a commercial lender, doesn’t this defeat the whole purpose of your entity? Why are banks going to consent to give you their proportion or interest of a farm business, when they can take it themselves? Financiers don’t give interest away they take more than there fair share! Commercial financial institutions products badly cater for most rural businesses in today’s environment, that’s why they are restructuring their products now! What about all the producers that are not looked upon favourable by a commercial lender, however may be able to…
Darren, we don’t intend to compete with commercial lenders, we are there to help farmers out who are doing it tough, we give interest rate relief and interest only period that helps farmers recover from events beyond their control, the bank will need to refinance the amount left on the RIC loan at the end of the 10 years loan period
Will the comments and questions below remain accessible after the webinar today? (for future reference)
Hi Tim, we will close off comments but it will remain accessible. We will also send a transcript to you if you registered for the webinar.
Fantastic , Thanks
would an overdraft limit be considered as borrowed money or does it have to be a fixed term loan? and if money is borrowed with the Rural Assistance Authority is that considered to be a commercial lender? i.e. so when determining the amount borrowed
500,000 over draft
500,000 Raa loan
Would you be able to borrow 1m from drought loan?
Hi Ed, sorry, neither of these would be considered ‘commercial debt’ for the purpose of our 50/50 split requirements.
I have a small property, with a contract fencing business also, would I be able to refinance my property and be able to finance sheep to stock it
yes Rhys, provided you meet all the eligibility criteria – like 75% of your time on farm and 50% income
Hi Rhys – thanks for your question. Depends on your income from farming. In normal circumstances 75% labour and 50% income are our thresholds. Hobby farms generally aren’t the scale to be eligible for a RIC farm business loan
We have been asked to have a valuation done, can we use any licensed valuer or do we have to use people approved by RIC
Hi there – we will provide valuation options to applicants if a valuation is required.
Thx, will ring tomorrow
How do you assess ‘long-term’ viability? And what kind of valuations do we need to undertake?
Hi sarah, to assess long-term viability, we look at whether the farm business can:
• service borrowings at commercial interest rates
• provide an adequate standard of living for relevant members of the farm business
• allow investment on-farm to maintain the farm’s productive assets
• provide funds for investment that increases long-term productivity.
The valuations needed will depend on the individual circumstances of each applicant. If a valuation is required, then we will let you know during the application process..
Hi
Just wanted clarification around what is deemed acceptable as a “Commercial Lender”. are Private commercial Lenders acceptable to partner with RIC
Hi Trent – thank for your question. We define commercial debt as debt that has been established upon commercial interest rates, terms and conditions. So, the private lender has provided finance with commercial terms then it’s most likely eligible.
Thanks Liz for confirmation.
1. In reference to long term viability, will the loans be assessed similar to Commercial banks indicators such as interest covers, debt service cover ratios etc and if so are these based on sensitivity analysis/factoring as well.
2. additionally if the business plan of the operation is reflective on say the operations YIYO performance say in “year three” going forward, will this be acceptable to take into consideration for assessment if it can be mitigated.
3. Regarding industry appetite. are all operation assess individually or are there additional “weightings/risk factors’ applied to some potential industries as some of the commercial banks may be employing ie Diary for example in certain regions.
Hi Trent,
For 1. to assess long-term viability, we look at whether the farm business can:
• service borrowings at commercial interest rates
• provide an adequate standard of living for relevant members of the farm business
• allow investment on-farm to maintain the farm’s productive assets
• provide funds for investment that increases long-term productivity.
The answers to the other 2 questions are a little complex and I’ll need to follow up with our loan assessment team. Can you private message me your phone number or email address and I’ll get someone to get back to you?
Or you can get in touch with loans@service.ric.gov.au
Thanks for all your questions. So many coming in. Thanks for you patience as Matt, Chris and Liz respond to you.
Airlie I seem to have lost the webinar and am only seeing the white screen with black writing and no sound – am I doing something obviously wrong? Nell Sullivan
Same here, we could only watch the 3rd video
Questions only being answered via text I assume…
Oh, I’m so sorry. That is the end of the webinar if you are on the third video. You now have the time to ask questions.
Yes, via text only in this forum so questions and answers can be shared. You can ask any questions over the phone to 1800 875 675.
The third video is the final one. The remaining time is dedicated to asking questions.
same for me
The third video is the final video and the white screen is playing during the time dedicated to asking any further questions.
The third video is the final video and the white screen is playing during the time dedicated to asking any further questions.
Can you make repayments in the interest only period?
Yes, you can make repayments anytime – but there is no redraw facility
If you have a bank loan plus an RAA Innovation loan as well as the $50,000 Drought loan are all these loans considered as Debt when applying for the RIC loan? So if you have say $600,000 in a mix of loans you may be eligible for a $300,000 RIC loan?
G’day – only the commercial loans count as 50% – so if you had $500,000 commercial loan you could have $500,000 in govt loans (that is RIC, RAA etc)
So if we have $300,000 commercial and $300,000 with RAA we are not eligible for RIC unless we increase our bank debt?
yes, you could refinance the RAA debt if that suits
My clients have expressed frustration around not being able to type directly into the document’s, possible to have a word document application at all?
Hi RFC3 sorry but we don’t have one at the moment. we working on a fillable PDF… stay tuned.
cheers thanks for that Liz.
Are there more specific details regarding the amount of non-farm assets and liquid assets are needed for prudent risk management?
Hi Lachlan, nothing further is available in guidelines, its a case by case basis – we have no problem with farmers having non-farm assets – just not a high level that would rule them out of concessional loans
Hi.
We currently have a RIC loan for half of our dairy farm debt. We have another debt which has purchased an income producing asset which provides off farm income which is used to do improvements on our farm.
Are we able to refinance this with a RIC loan provided all other requirements are met?
Hi – do you mean you have state concessional loan? It sounds like its not a farm business debt? Perhaps best to talk to our loan assessment team to talk through your circumstances. 1800 875 675.
Sorry, I think its an RAA loan not a RIC loan??
Would the issues that farmers have had within the Live Export sheep industry and impact on their business this year qualify for an event
Hi RFC3 – it could qualify, but the applicant would need to show that no other reasonable markets are available for their sheep.
The eligibility seem amazingly broad… is purchasing land included?
Hi Sue, we have tried to keep the eligible loan uses very broad – as we know each farmer is in the best position to decide what’s best on their farm.
The purchase of land can be approved in some circumstances, but there are additional requirements. If you are seeking a loan for land will need to provide a business case outlining how the additional land will enhance the productivity and/or risk management of your business. The business case will need to be supported by independent financial advice.
Great to see RIC online today to answer questions – fantastic idea to be this accessible!! 🙂
Thanks Alexandra. Yes, it helps for people to ask specific questions while moving through the webinar at their own pace.
Thanks Alexandra – doing our best to keep up with all the questions flooding in!
Hi Liz, if we were unsuccessful with the Drought Loan is the application transferable to apply for the Farm Investment loan? Without starting from scratch again?
Hi Katie – was that a RIC loan? For privacy reasons, we won’t go into detail on applications. Gnerally speaking, you won’t need to do through the whole process again but there is additional requirements that apply for a farm investment loan. The key one being supplying produce interstate or overseas. Call us though 1800 875 675 to discuss before you start.
OK thanks Liz.
Can we get it in a word document
What would you like in the word doc exactly Edith?
If you are looking for a transcript of today’s session, we will be sending out after the session to those registered to the session.
The actual application. No room in boxes to tell the story on drought-affected ect
Hi Edith – a fillable PDF is coming soon…I appreciate it’s frustrating. We are fixing it as soon as we can.
If a loan is approved does it need to be completely drawn within a set time period?
G’day, we allow gradual drawdowns over 6 months
We’ve been in the beef cattle industry for a while now but are hamstrung by a family debt not of my doing . I’m trying to get my part of the farm seperated from the bank , claiming it’s encumbered by the debt . Succession planning has stalled because of it . We currently have no debt but to make succession planning go ahead , we need to secure a partial loan to get the bank onside . Can RIC for this purpose ?
Hi Martin, we may be able to help, its probably best to talk through with our loan team on 1800 875 675
where can this help young farmers starting in the farming industry?
G’day Adolphin, we can help young farmers, they need to have at least 3 years relevant experience, 50% commercial debt and meet other eligibility requirements,
We have a cattle property under a partnership but I have off farm income (own business) which outweighs the farm income. We are looking to do fencing improvements and also water infrastructure to move into a more viable operation. Would this be a problem in applying for a loan and would we be able to apply for a loan for these items?
Hi Natalie, our requirement is only that ONE member of the farm business must meet the 50% income from farm business requirement. So your off-farm income won’t be a problem, so long as someone else in the business earns their income primarily from the farm.
Are you able to apply for a farm investment loan as well as a drought loan, or are they the same thing?
Hi Airlie – the two loan types are very similar but have slightly different eligibility criteria. Technically, you could apply for both at the same time, but to save you filling out so much paperwork, it might be best if you call the hotline on 1800 875 675 to talk though which loan would be best for your circumstances.
Are Victorian farmers eligible to apply for drought loans given impact has not been over a 2 year period?
Hi Maryanne – how long has it been?
Farms located in RIC
eligible drought areas, depends on the region but roughly moving into 12 months of dry conditions.
If you expect a further 12 months of dry conditions, then you will be eligible in you’re in the eligible area map – remember you need to meet the criteria though. Can be one year past, one year future. that help?
OK, got it.
It can be one year forecast if it’s drought.
Can you elaborate please?
Are you happy your question has been answered Maryanne?
You mentined at start first 5 years is interest ONLY, I thought the publicity had said 5 years interest FREE.
HI John, thanks for your question. Yep, the first five years are interest only – not interest free.
Criteria for some other loans are that you must own at least 50% of your property – is this a criteria for RIC loans too?
Hi Janey, no, this isn’t one of our requirements.
Hi chris, So if we have a commercial mortgage on our farm property of say $500k and the property has a value of $950k, could we re-finance that $500k to split 50/50 with a commercial lender?
If you have existing commercial debt of $500k, you could refinance $250k with the RIC (leaving a 50/50 split RIC and commercial lender).
Alternatively, you could borrow new debt from the RIC up to the amount you hold with a commercial lender (in this case you could borrow $500K new debt), but you might be limited with security.
If you’d like to talk through your individual circumstances in detail, and the different options we could offer, it might be best to call our hotline on 1800 875675.
can I use a R.I.C. loan to buy my parents out of the farm?
Hi Holly, this would be possible, you would still need to meet all other criteria including things like 50% commercial debt and 3 years relevant experience
We have been working on the farm with my parents for over 10, but I don’t really have anything that proves it. how can I show I’ve got experience if my name isn’t on any of the docs?
stat dec would cover this Holly in the absence of anything else
Anneleise
Hi Anneleise!
What is the turnaround time from application to seeing the re financing hit accounts?
G’day Araluen14, we aim to have 75% turned around in 20 working days provided all the information is available
Y
Hi, I agist land to farmers, and maintain the fencing etc. Am I eligible? Do I have to be a primary producer to apply?
Hi Katie, our loans are available to farmers who ‘own land (including lease arrangements) and use that land for farming purposes. We consider agistment to be within this definition, so long as you also commit 75% of your labour to the farm and earn 50% of your income from the farm.
Are interest rates variable based on the RBA cash rate or Com Government Bond Rate?
Gday Lachlan, Com Govt 10 yr Bond Rate – and yes they are variable
Hi Liz We are in a Lease farm situation for our dairy business. For the loans that are investment on the land does the lease situation complicate things
hi Black Jack… thanks for your question. RIC loans are there for farmers who lease but you still need some form of security.
thanks Liz we have our livestock currently being paid off as we borrowed to purchase them but they are our biggest asset. being that they are covered as security for that loan does that rule them out
Hi – without knowing your circumstances entirely, it’s hard to say. If you want look into your options I recommend you speak to our loans team 1800 875 675. They know agribusiness and can talk through it with you
Hi, what sort of support is available for drought effected croppers who farm 100% leased land and cannot offer collateral?
Hi Tony, RIC loans are available to farmers who lease their land, but you will need some form of security.
Thanks Chris, are assets other than land appropriate? (could you use machinery as collateral for example?)
We will primarily look at land, water rights and livestock. We normally wouldn’t look at machinery on it’s own – but in this case it might be best if you call our hotline on 1800 875 675 to talk through your specific circumstances.
Hi everyone! You’ll see it says $1m behind Matt on the pull up banner – but our loans have increased to $2m!
Hi everyone, Chris from the RIC here. Looking forward to answering all your questions!