Learn how RIC defines financial viability and how we assess it in loan applications.
What you’ll learn:
What financial viability means
To be eligible for a RIC loan, your farm business must be a solid business that is experiencing a temporary financial downturn because of unforeseen circumstances outside of their control.
A farm business is considered financially viable when the business generates sufficient net profit after fixed and variable expenses to:
- 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.
For example, you should be able to show that you will meet your commercial loan repayments and provide an adequate standard of living for members of the farm business.
RIC requires its loan customers to be financially viable within the 10-year term of the loan.
Evidence required to show financial viability
RIC will ask for financial documents as a part of your application process. In the first instance, submit your application, including:
- Financial statements for at least the past three years for all entities associated with your application, including accountant prepared profit and loss statement, balance sheet and depreciation schedules
- Statement of Position including details of all assets and liabilities for all individuals and entities relating to the business
- Cash flow budget - ‘year in year out’ (YIYO) providing a detailed cash flow forecast representing the average business turn over once you achieve YIYO production levels at optimum stocking/cropping rates for a long-term average going forward.
After your application has been submitted, during assessment our Agri Lending Specialist will request additional documentation to support your application, which may include:
- Australian Taxation Office ‘Integrated Client Account Statements’ for all individuals and entities. These can be obtained from your accountant.
- ATO tax returns for all individuals and entities from the last three years
- Personal bank statements from the last 12 months for all transaction accounts, savings accounts and everyday accounts for all individuals
- Business bank statements from the last 12 months on all overdraft accounts, trading accounts or working accounts.
- Business loan statements from the last 12 months on all business market loans, term loans or other business loans
- Bank ‘Letter of Offer’ confirmation for commercial facilities
- Certified Trust Deed containing state revenue stamped evidence of stamp duty being paid.
- Rates notice current and relating to all properties. Including water licences if applicable
- Current certified ID documents including driver’s licences, passports or Medicare card, Birth certificate and Marriage certificate (in case of name change)
- Business Plan aligned to your YIYO projections
- Drought Management Plan if you have applied for a Drought Loan
- Succession Plan if you have applied for an AgriStarter Loan as a succession applicant.
As a reference guide to the documents required, download the RIC Loan Application Document Checklist.