Farmland Financing Program — Up to 150 Acres
Highlights
This program is a fantastic opportunity for your farming business. It offers two financing options tailored to your needs. You can get a term loan to finance up to 90%-100% of the purchase price for up to 150 acres of farmland, or up to 80% of the purchase price for up to 450 acres. The interest rates are competitive, with a fixed rate of 6% over a five-year term. You can choose between blended principal and interest payments or interest-only payments for the first five years.
What's in it for you?
- Significant financing to expand or start your farming operations.
- Flexible payment options to suit your financial situation.
- Government-backed support, ensuring stability and reliability.
Being approved for this program can help you secure the land you need to grow your business. The application process is straightforward, and if you meet the criteria, qualifying is not difficult. This is a unique chance to invest in your future with the support of Finance PEI.
Financing Details
Type of Financing:
- Term Loan: Finance up to 90%-100% of the purchase price for a maximum of 150 acres of farmland.
- Term Loan: Finance up to 80% of the purchase price for a maximum of 450 acres of farmland.
Repayment Terms and Interest Rates:
- 150 Acres Loan: Fixed interest rate of 6% over a five-year term with blended principal and interest payments.
- 450 Acres Loan:
- Option 1: Interest-only payments for five years at the prevailing interest rate.
- Option 2: Fixed interest rate of 6% over a five-year term with blended principal and interest payments.
Eligible Expenses:
- Funds can be used exclusively for the purchase of farmland.
Ineligible Expenses:
- Funds cannot be used for woodland, barns, other structures, or equipment.
Fees:
- No specific fees associated with the program are mentioned.
Qualifications
- Must be a farmer.
- Must have an acceptable combination of five years post-secondary education in agriculture and/or work experience in a farming operation.
- For expansion/succession: the farming operation must be a viable business venture with annual sales of at least $15,000 from agricultural commodities, supported by Income Tax Returns.
- For new entrants: cash flow projections must indicate that required annual sales of $15,000 from agricultural commodities will be met and adequate debt servicing to support the proposed land purchase.
- Must have a valid Environmental Farm Plan and Soil Conservation Plan for the farmland being purchased.
- The land being financed must be available to be taken as a first charge against the loan.
- Shareholder(s) must provide a Personal Guarantee.
Must be a Canadian citizen and a permanent resident of Prince Edward Island.
Disqualifications:
- Financing is not eligible for woodland, barns, or other structures or equipment.
Description
This program offers you a chance to borrow up to 90% - 100% of the purchase price for up to 150 acres of farmland. Alternatively, you can borrow up to 80% of the purchase price for up to 450 acres.
You can choose from two financing options:
- A fixed interest rate of 6% over a five-year term with blended principal and interest payments.
- Interest-only payments for five years at the prevailing interest rate.
Key benefits include:
- Flexible financing options tailored to your needs.
- Support for new and expanding farms or those involved in farmland succession.
- A significant investment portfolio of $10 million dedicated to this support.
This program is designed to help you grow your farming business by providing the financial resources needed to purchase farmland. The funds are exclusively for farmland, not for woodland, barns, or other structures.
Program Steps
Complete the Application for Financial Assistance:
- Obtain the application form from Finance PEI.
Prepare Required Documentation:
- Business Plan: Prepared by a qualified Chartered Accountant, acceptable to Finance PEI. It should include:
- 3 years of cash flow projections.
- 3 years of historical financial statements (if applicable).
- Appraisal: Conducted by an Accredited Appraiser.
- Environmental Farm Plan: Ensure it is valid for the farmland being purchased.
- Soil Conservation Plan: Ensure it is valid for the farmland being purchased.
- Business Plan: Prepared by a qualified Chartered Accountant, acceptable to Finance PEI. It should include:
Submit the Application and Documentation:
- Send the completed application and all required documents to an Account Manager at Finance PEI.
Attend an Interview:
- The Account Manager will schedule an interview to discuss your business proposal and the next steps.
Review and Approval:
- Finance PEI will review your application and documentation.
- They may request additional information if needed.
Loan Disbursement:
- Upon approval, discuss the final loan terms, including interest rates and repayment schedules.
- Once agreed upon, the loan funds will be disbursed for the purchase of farmland.