Drought loans for farm businesses

Overview

Drought Loans provide farm businesses with loans to help them prepare for, manage through and recover from drought.

The loans may be used to:

• feed and water stock
• refinance existing debt
• pay for operating expenses or capital
• enhance productivity
• fund drought-related activities

Loans of up to $2 million over a period of 10 years are available. Repayments will be tailored to the cash flow of the business and are interest free for the first 2 years, followed by 3 years interest only and then 5 years principal and interest. After 10 years, any remaining balance on the loan can be refinanced with a commercial lender.

Check if you can apply

To be eligible, you must:

• be an Australian citizen or permanent resident
• contribute at least 75% of your labour to the farm business (under normal circumstances)
• earn at least 50% of your income from the farm business (under normal circumstances)
• have a drought management plan
• provide security for the loan
• secure the support of your commercial lender for the proposed loan

Additionally, the farm business you are running must:

• be located in an eligible area of Australia
• have existing commercial debt
• be registered for tax purposes in Australia with an Australian business number (ABN) and be registered for goods and services tax (GST)
• be in financial need of a loan
• have the capacity to repay the loan
• operate as a sole trader, trust, partnership or private company
• be in the agriculture, horticulture, pastoral, apiculture, or aquaculture industry
• be solvent