Eligibility basics

Every RIC loan has its own guidelines, and RIC makes the final call. But the main farm loans share a set of basic tests. Run through these before you spend hours on the form. This is general information, not a decision on your case.

You and your farm

For the Drought Loan, RIC says:

• You're an Australian citizen or permanent resident.
• You put in, or plan to put in, at least 75% of your labour to the farm business in normal times.
• You earn, or plan to earn, at least 50% of your income from the farm business in normal times.
• You own or lease land used for farming, which can include agistment.

The AgriStarter Loan uses a lower labour test: at least 50% of your labour, and at least 50% of your income.

Your business

The business must:

• Be in financial need. For the Drought Loan, that means something outside your control has cut your profit, cashflow or financial resilience.
• Be viable. It can repay the loan and stay financially sound in the long term.
• Have commercial debt already. AgriStarter also accepts an agreement to take on commercial debt within a reasonable time.
• Have an ABN and be registered for GST.
• Be a sole trader, trust, partnership or private company, and not bankrupt or under external administration.

What else you need

You also need security for the loan (property RIC can sell if the loan isn't repaid), and your commercial lender's support. For the Drought Loan, you need a drought management plan, which we cover in the next lesson.

The tests people trip on

From our time in banking, three things catch people out:

1. Viability. RIC wants to see the business can repay in a normal year. A clear cashflow matters more than a long story.
2. Bank support. If your bank isn't on board, the application stalls. Talk to them first.
3. Off-farm income. If off-farm work has grown, check the income test carefully.

If you're unsure about any test, ring RIC on 1800 875 675 before you start. If you're in financial hardship, the Rural Financial Counselling Service can help with applications for free on 1300 771 741.