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AgriStarter Loan

Loans to assist first-time farmers and loans to support farm succession arrangements

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Purpose

To encourage and support people in securing their first farming business.

To assist with farm business succession planning and giving effect to succession plans.

Use this loan to:

  • Fund purchases

    Fund the purchase of an existing farm business, land, infrastructure and other assets as part of establishing or developing a farm business.

  • Fund succession

    Buy out relatives during farm business succession. Pay costs associated with the succession planning process, legal costs or stamp duty.

  • Invest

    Invest in new infrastructure, machinery or productivity enhancements.

  • Refinance debt

    Refinance certain existing farm-related 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

Five years interest only, then five years’ principal and interest over a 10-year loan 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.

Loan types

There are two kinds of AgriStarter loans – first farmer loans and succession loans.

You can apply for a first farmer loan if you are seeking to purchase, establish or develop a farm business in which you hold or will hold the sole interest or a controlling interest.

You can also apply if you are a lease or share farmer and wish to purchase, establish or develop a farm business, even if this results in the business no longer involving share farming or leasing.

You can apply for a succession loan if your farm business is undertaking or has undertaken succession planning.

Refer to the loan guidelines for further eligibility requirements.

AgriStarter Loan information webinar

Watch a replay of our latest information webinar to learn how a RIC AgriStarter Loan can support eligible farm businesses during start-up or succession. 

Eligibility

Discover if a RIC loan is right for you, check your eligibility with our quick quiz.

Take our AgriStarter Loan quick quiz

You
  • are an Australian citizen or permanent resident
  • contribute or plan to contribute at least 50% of your labour to the farm business
  • earn or plan to earn at least 50% of your income from the farm business (under normal circumstances)
Your business
  • is in financial need of a loan
  • is financially viable or has sound prospects of becoming financially viable within the term of the loan
  • undertakes all primary production aspects of the business wholly within Australia
  • operates as a sole trader, partnership, a trust or a corporation
  • is registered for tax purposes in Australia with an ABN and is registered for GST
  • has the capacity to repay the loan
  • has existing commercial debt or can obtain commercial debt
  • is an eligible industry such as agriculture, horticulture, pastoral, beekeeping (apiculture), or aquaculture industry
  • is not under external administration or bankruptcy
  • has at least one member who is an Australian citizen or a permanent resident
  • has a connection to ‘constitutional trade and commerce’
You must
  • 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/agristarter#resources
  • 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

Frequently asked questions

The RIC will work with the applicant and commercial lender to determine the security arrangements through mutual agreement.

The RIC does not insist on first mortgage and has worked closely with all main rural lenders to create protocols to speed up security discussions and arrangements.

Loans are expected to have sufficient security within standard lending practices. Security will be assessed on a case-by-case basis.

It can include a registered mortgage over land, a registered mortgage over livestock or a registered security interest in water rights.

Security values are generally discounted to the purchase price or owner estimated value.

AgriStarter Loan applicants are expected to have built up equity prior to applying.

Addressing security requirements may be assisted through the applicant’s cash contribution to their purchase or security over unencumbered off-farm assets e.g. residence or investments.

If a successor is purchasing an interest in the farm business, it is expected that their bank will apportion the relevant debt to the successor in line with the share they are purchasing.

Consequently, they will be taking on commercial debt in their own name.

A business that derives the majority of its income from primary production within the agricultural, horticultural, pastoral, apicultural or aquacultural industries.

Industries eligible for a RIC loan

Yes, if the vendor finance is set on commercial terms (i.e. a commercial interest rate), with set regular repayments and a written agreement that could be considered eligible commercial debt and the AgriStarter Loan could supply the other 50% of the debt required up to $2 million.

The Year In Year Out (YIYO) cash flow projection will be important in our credit assessment.

This should reflect the operation once it has developed to full productive capacity.

We will require at least two years of projected cash flows.

Applicants are encouraged to supply cropping plans or stock schedules to support the transition to achieving the YIYO cash flow.

For applicants undertaking the establishment of tree crop enterprises, cash flows should reflect the emerging productive capacity of their trees and the YIYO cash flow will need to demonstrate the viability of the enterprise within the 10-year term of the loan.

Yes, cash flow and production forecasts should demonstrate how, with the assistance of the AgriStarter Loan, the applicant will meet the loan guidelines.

Applicants are encouraged to discuss their intention to apply for an AgriStarter Loan with their bank prior to application.

Ideally the bank’s commitment should be known prior to applying.

Applicants should seek their own independent financial advice in determining if an AgriStarter Loan is the right option for you.

The AgriStarter Loan is for new entrants to primary production. This was required when the loan was established.

Potential applicants who are not ‘recent’ entrants should not self-assess and may still be eligible to apply provided they are able to provide financial and physical reasons why the development of their enterprise has been impacted by events beyond their control and demonstrate the need for the AgriStarter Loan.

Applicants must operate as a sole trader, partnership, trust or corporation. If an applicant is operating multiple trusts, we encourage you to clearly identify the interplay between those trusts.

Potential applicants are encouraged to contact us on 1800 875 675 to discuss individual circumstances.

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.

AgriStarter Loan Guidelines [547 kB]

Document checklist

If applying online, follow the document checklist to ensure you submit a complete application.

 

Document checklist [204KB]

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.
AgriStarter Loan Application Form [702kB]

Fact sheet

Download a printable fact sheet for this loan product.

Agristarter Loan fact sheet

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.

AgriStarter Loan Guidelines [547 kB]

Document checklist

If applying online, follow the document checklist to ensure you submit a complete application.

 

Document checklist [204KB]

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.
AgriStarter Loan Application Form [702kB]

Fact sheet

Download a printable fact sheet for this loan product.

Agristarter Loan fact sheet

Loan scenarios

Tom and Alice have always wanted to own their own farm after Alice spent a lot of time in regional Victoria on farms with her father who was a shearer. Tom caught the farming bug showing steers with his school. They have both worked hard to establish a small residential property portfolio and a small beef cattle breeding herd currently being agisted on the property that Tom is managing. The portfolio and cattle provide them with equity and security to access a loan to buy their first farm.

They have spoken to their bank about applying for a loan to purchase a farm and will apply for an AgriStarter Loan. They plan to finance up to half of the purchase and pay interest only on the RIC portion of the loan for the first five years, allowing to build equity with their bank loan. With Tom’s relevant management experience and ongoing employment, they have provided a comprehensive business plan on how they plan to repay the RIC loan during the term. The business plan includes how they will develop the property, build up breeder numbers and expand their operation so the farm will be their principal business and be able to supply interstate markets.

Melissa is a fifth-generation South Australian grazier who joined the trading partnership with her parents at the first stage of farm succession five years ago. As the enterprise recovers from drought, Melissa has plans to improve the productivity of the farm and her parents are keen to stick to the succession plan to allow them to retire as planned.

Melissa plans to apply for an AgriStarter Loan to progress towards owning a majority share of the farm business including land. Her parents will help guarantee the loan as per their succession plan. Melissa will be borrowing an equal amount from her bank to fund some of the property purchase and to invest in new infrastructure to increase the farm business’s efficiency and reduce operating costs.

Candice and Alex are currently working through farm succession with their parents and are looking to return home to start working with their parents. Fortunately, the current enterprise will be big enough to accommodate Candice and Alex with a viable property each, once their parents have retired. Their parents want to be sure that both children are committed and will be able to take over their own enterprise even though they have grown up on the farm.

Both Candice and Alex will take over a percentage of their parent’s bank debt and borrow the equivalent amount from the RIC to each buy 25 per cent of the trading entity and a portion of the property identified in the family succession plan. As Candice and Alex build their equity through reducing their current debts, they will be able to purchase more land and a share in the business.

Interested in an AgriStarter Loan?

Explore our educational toolkit to help you understand if you are eligible for a RIC loan.

Before you apply

Ready to start a RIC loan application?

Check what you need before starting an application, download helpful resources and apply for a RIC loan.

How to apply

Ask a question

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