Farm Credit Canada (FCC) is increasing its support for young farmers, doubling the amount of credit available under the FCC Young Farmer Loan.
“A big focus of FCC’s mandate is to provide innovative financing products and knowledge to assist the next generation of Canadian farmers,” said Michael Hoffort, FCC president and CEO. “Changes to the Young Farmer Loan recognize the rising cost for young farmers to become established in the industry.”
In addition to doubling the credit limit to $1 million from $500,000, FCC has lowered the possible minimum down payment required for a Young Farmer Loan to 20 per cent from 25 per cent of the value of the loan, which supports the purchase or improvement of farmland and buildings. This potentially makes more working capital available to qualified producers, under age 40, as they look to enter the industry or grow their business.
FCC will continue to offer a variable lending rate at prime plus 0.5 per cent, as well as offer a special fixed rate if producers choose that avenue of repayment. No loan processing fees are charged on the Young Farmer Loan, which was introduced in 2012.
“Our customers benefit when we effectively manage risk at every stage of their business lifecycle, whether they are just beginning to pursue their dreams or preparing to leave the industry,” Hoffort said. “Our lending decisions are based on sound business plans, strong relationships with our customers and taking the time to understand their business.”
The loan fills a gap in the marketplace by enabling young farmers to access the credit they need to get started and grow in the industry.
“Young farmers tell me about their concerns and aspirations for their future in the agriculture sector, and access to capital is definitely one. Doubling the amount of credit available to young farmers helps them to successfully make their careers in agriculture,” said Lawrence MacAulay, minister of Agriculture and Agri-Food Canada. “I applaud FCC’s commitment to taking a long-term view when it comes to agriculture, so that they can support the next generation of farmer through every stage of their career.”
“The future of the industry depends on attracting the next generation of young, bright entrepreneurs to careers in agriculture, as well as helping those already in the industry realize their dreams of eventually taking over the family farm,” said Ron Bonnett, president of the Canadian Federation of Agriculture, representing more than 200,000 farm families through its member organizations. “Access to capital through fair and flexible financing helps ensure a smooth and successful transition for the next generation of farmer.”
