Farmland Financing Program — Up to 450 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 at a fixed interest rate of 6% over five years. Alternatively, you can choose a term loan to finance up to 80% of the purchase price for up to 450 acres of farmland, with flexible payment options, including interest-only payments for five years or a fixed interest rate of 6%.
What's in it for you?
- High financing limits: Up to 100% of the purchase price for 150 acres or 80% for 450 acres.
- Fixed interest rate: Secure a 6% fixed rate, providing stability and predictability.
- Flexible payment options: Choose between blended principal and interest payments or interest-only payments.
Being approved for this program will help you expand or start your farming business with less financial strain. The application process is straightforward, and if you meet the criteria, qualifying is not hard. This program is designed to support your growth and ensure your business thrives.
Financing Details
Type of Financing:
- Term Loan
Repayment Terms and Interest Rates:
- Option 1: Finance up to 90% - 100% of the purchase price of a maximum of 150 acres of farmland.
- Fixed interest rate: 6% over a five-year term.
- Blended principal and interest payments.
- Option 2: Finance up to 80% of the purchase price of a maximum of 450 acres of farmland.
- Choice A: Interest-only payments for a five-year period at the prevailing interest rate.
- Choice B: Fixed interest rate: 6% over a five-year term, with blended principal and interest payments.
Eligible Expenses:
- Purchase of farmland.
Ineligible Expenses:
- Woodland
- Barns or other structures
- Equipment
Fees:
- No specific fees 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 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.
Must be a permanent resident of Prince Edward Island.
Disqualifications:
- Financing is not eligible for woodland, barns, or other structures or equipment.
Description
This program offers two financing options to help you buy farmland in Prince Edward Island.
You can get a loan to cover up to 90%-100% of the purchase price for up to 150 acres of farmland. This comes with a fixed interest rate of 6% over five years, with blended principal and interest payments. Alternatively, you can choose a loan to cover up to 80% of the purchase price for up to 450 acres of farmland. For this option, you can either make interest-only payments for five years at the current interest rate or choose a fixed interest rate of 6% over five years with blended payments.
This financing is only for farmland—it does not cover woodland, barns, or other structures. The program has a $10 million investment portfolio, ensuring substantial support for your business. This is a great opportunity to expand or start your farming operations with favorable loan terms.
Program Steps
Complete the Application for Financial Assistance: Obtain the application form for financial assistance from Finance PEI.
Prepare Required Documentation: Gather the following documents to support your application:
- Business Plan prepared by a qualified Chartered Accountant, including:
- 3 years of cash flow projections
- 3 years of historical financial statements (if applicable)
- Appraisal by an Accredited Appraiser
- Income Tax Returns showing annual sales of at least $15,000 from agricultural commodities (for expansion/succession applicants)
- Cash flow projections indicating required annual sales of $15,000 from agricultural commodities (for new entrants)
- Valid Environmental Farm Plan and Soil Conservation Plan for the farmland being purchased
- Business Plan prepared by a qualified Chartered Accountant, including:
Submit the Application and Documentation: Send the completed application form and all required documentation to an Account Manager at Finance PEI.
Interview with Account Manager: Schedule and attend an interview with the Account Manager to discuss your business proposal and the next steps in the application process.
Review and Approval: The Account Manager will review your application and documentation to determine eligibility. This may involve additional discussions or requests for further information.
Finalizing Loan Terms: Upon approval, discuss and finalize the loan terms, including the interest rate, repayment schedule, and any associated fees.
Loan Disbursement: Once all terms are agreed upon, the loan funds will be disbursed, allowing you to proceed with the purchase of the farmland.