Advance Payments Program (Agriculture)
Highlights
This program is designed for agricultural producers like you. It offers up to $1,000,000 in cash advances, with the first $250,000 interest-free for 2024. This means you can access significant funds without the burden of high-interest rates, providing you with the cash flow needed to cover costs until you sell your products.
Why apply?
- Interest savings: The government pays the interest on the first $250,000.
- Flexible repayment: Repay as you sell your products, with up to 18 months for most commodities and 24 months for cattle and bison.
- Marketing flexibility: Sell your products based on market conditions, not immediate cash needs.
What's in it for you?
- Low-cost financing: Preferential interest rates on amounts over $250,000.
- Security: The program is backed by the Government of Canada, ensuring reliability and support.
Qualifying is straightforward, and the program is administered through 27 producer organizations across Canada, making it accessible and easy to apply. This is a valuable opportunity to enhance your business's financial stability and growth.
Financing Details
Type of Financing: Loan
Repayment Terms and Interest Rates:
- You can access up to $1,000,000 in total advances.
- The Government of Canada pays the interest on the first $250,000 for the 2024 program year.
- Preferential interest rates apply to the remaining amount.
- You have up to 18 months to fully repay the advance for most commodities.
- For cattle and bison, you have up to 24 months to repay.
Eligible Expenses:
- Advances are based on the value of eligible agricultural products you will produce or have in storage.
- Funds can be used to cover costs associated with producing or storing these agricultural products.
Ineligible Expenses:
- Funds cannot be used for non-agricultural expenses or any purposes not directly related to the production or storage of eligible agricultural products.
Fees:
- No specific fees are mentioned for participating in the program. However, it is advisable to contact your APP Administrator for more details on any potential fees.
Qualifications
- Must be an agricultural producer.
- Must produce or have in storage eligible agricultural products.
- Must provide security for the advance, which includes the agricultural product and potentially proceeds from an eligible business risk management program or another acceptable form of security.
Must work with one of the 27 participating producer organizations (APP Administrators) across Canada.
Disqualifications:
- Businesses that cannot provide the required security for the advance.
- Businesses that are declared in default on previous advances.
Description
This program offers your business a chance to borrow up to $1,000,000. The Government of Canada will pay the interest on the first $250,000 for 2024. This means you can save on interest costs and have more cash flow to cover your expenses until you sell your products.
You can use the money for:
- Covering production costs
- Storing your agricultural products
- Managing your cash flow
Repayments are flexible. You repay the advance as you sell your products, with up to 18 months for most commodities and up to 24 months for cattle and bison. This allows you to sell based on market conditions, not just your immediate cash needs.
Key benefits include:
- Interest-free advances up to $250,000 for 2024
- Low-cost cash advances up to $1,000,000
- Flexible repayment terms based on your sales
This program can help your business manage finances better and provide the flexibility to market your products effectively.
Program Steps
Contact an APP Administrator: Reach out to one of the 27 participating producer organizations (APP Administrators) to start your application process. They will guide you through the specific requirements and steps.
Prepare Necessary Documentation: Gather the required documents to support your application. These typically include:
- Proof of identity
- Business registration documents
- Financial statements
- Production or inventory records of eligible agricultural products
- Security agreements (e.g., AgriInsurance, AgriStability, or other acceptable forms of security)
Complete the Application Form: Fill out the application form provided by your APP Administrator. Ensure all sections are completed accurately to avoid delays.
Submit Your Application: Submit the completed application form along with the required documentation to your APP Administrator. They will review your submission for completeness and accuracy.
Review and Approval: The APP Administrator will review your application and documentation. They may contact you for additional information or clarification if needed.
Receive Your Cash Advance: Once your application is approved, the APP Administrator will disburse the cash advance based on the value of your eligible agricultural products.
Manage Repayments: As you sell your agricultural products, make repayments to the advance. You have up to 18 months to fully repay the advance for most commodities, and up to 24 months for cattle and bison.
Maintain Communication: Stay in touch with your APP Administrator throughout the program period to ensure compliance and address any issues that may arise.