Agriculture Loan and Loan Guarantees

Who is eligible?

In Canada, individuals or entities who can apply for the Agriculture Loan and Loan Guarantees program through the Department of Agriculture, Aquaculture and Fisheries (DAAF) include:- New entrants to farming (those who have owned a farm for five years or less) - Established farmers looking to purchase an existing farm, start a new farm, purchase shares in a farming operation, buy land for farming, develop land for farming, or need working capital.Applicants must seek initial financing from private lenders, after which they may apply for DAAF's program to meet any financing gaps. They must also meet certain equity and security requirements, and submit a comprehensive business plan.

Who is not eligible

There are some types of companies that are not eligible for this grant:

• Non-profit organizations
• Individuals

Eligible expenses

The eligible expenses for the Agriculture Loan and Loan Guarantees program focus on costs associated with acquiring and developing farming operations.

• Purchase an existing farm.
• Start a new farm.
• Purchase shares in a farming operation.
• Purchase land for farming.
• Develop land for farming.
• Working capital requirements.

Here are additional relevant details for this grant:

• Interest rates for loans are determined on a case-by-case basis, allowing for potentially lower rates depending on the project's risk assessment.
• Repayment terms are flexible and matched to the cash flow projections in the business plan, which can include interest-only payments or both principal and interest payments.
• Younger farmers or new entrants may have advantages with lower interest rates and equity requirements, potentially making it easier for them to secure funding.
• No application fee is required, which reduces the initial financial burden on applicants.
• A loan guarantee fee of 1.5% is payable annually, which is a consideration for financial planning and budgeting of applicants.