In addition to debt reduction and preparing for drought, the top five RIC loan uses in 2025 also included improving on-farm sustainability, in-drought management and improving their financial position to enable them to negotiate a better interest rate with their commercial bank.
While RIC loan farm businesses were less focused on growth and simply trying to manage through significant unforeseen events, almost all customers felt more confident in their future with a RIC loan.
RIC chief executive John Howard says the underlying theme in this year’s research was consolidation, with farmers seeking to reduce their debt and manage financial volatility imposed by challenges of extreme weather disruption, increased operating costs and capital expenditure.
“In our RIC Farm Loans Customer Insights Brief 2025, the customers who responded to our independent survey said they’re using their loans to pay down their debt, be better drought prepared and improve sustainability, or manage through the drought they’re currently in,” John says.
“Last financial year, new RIC loan customers experienced an average 2.26 per cent discount on their interest rate compared to their commercial loan, saving more than $20,000 each year in interest payments on an average $1 million RIC loan – money farmers can inject straight into their farm business,” he says.
“RIC customers advised they are using, or plan to use, their improved financial position gained from lower interest rates and interest only payments in the first five years of the loan term to implement sustainable practices on their farm to be ready and prepared for future disruption.
“Our customers report their RIC loan has enabled them to secure a better risk position so they can negotiate a better interest rate with their bank when they are ready to discharge their RIC loan and refinance back to them.
“We’ve been doing this research for five years now and the latest results show our farmers are focused on consolidation and strengthening their balance sheet rather than seeking to expand and grow.
“While just over half of farmers (55 per cent) agreed their RIC loan enabled business growth, however this was down from 71 per cent last year, most likely due to factors such as drought and other challenging market conditions.
“Overall, we’re pleased to see 86 per cent of responses from customers say they have greater confidence in the future of their farm or farming small business with a RIC loan.”
Top five RIC loan uses in 2025
- Pay down debt
- Improve drought preparedness
- Implement sustainable agricultural practices on farm
- Manage through a current drought
- Negotiate better interest rates with their bank or commercial lender
More details at ric.gov.au/about/reporting/customer-insights-report
