Farm Credit Canada Loans: Programs Currently Available for Ontario Businesses -

As an agricultural business, finding the funding needed to purchase equipment and to grow your business can be a challenge. Equipment for farming, agribusiness, and food and beverage businesses is expensive, and a lack of financing can leave you unable to make the changes you need to make.

You don’t have to go it alone when you are seeking financing for your ag-related business, though. Farm Credit Canada, or FCC, has multiple loan options available that you can use. These are loans that carry advantageous terms for you, giving you the freedom you need to keep your business moving forward.

FCC offers its loan products throughout Canada, including in Ontario. Even though Ontario has a significant percentage of Canada’s population and large cities like Toronto and Ottawa, it’s also a leading province for farming. Taking advantage of FCC’s loans can be the key to growth … both in the field and in your ag business profits.

What is Farm Credit Canada?

Farm Credit Canada is a lending organization that focuses on Canadian farms and ag-related businesses. FCC operates under the federal government’s Farm Credit Canada Act and the Financial Administration Act.

FCC only provides loans to agriculture-related businesses and farms. This sets it apart from other business lenders, who may focus on multiple industries. Throughout its 60 years in operation, FCC has more than 100,000 customers. Its portfolio is greater than $47 billion.

By focusing on agriculture, Farm Credit Canada is able to fully comprehend the needs of farmers and ag-related businesses, which often makes the loan process go smoother.

FCC commits to following ESG (environmental, social, and governance) policies. FCC uses these policies to support agricultural customers and to govern the organization’s operations.

Beyond granting loans, FCC provides support for ag-related entrepreneurs through educational materials and access to experts. It is accountable to the federal government in Canada. The Minister of Agriculture and Agri-Food sets the priorities for FCC and governs its policies.

One of the most important aspects of FCC is the transparency with which it works. You can fully research FCC before seeking a loan. It’s important for FCC to be trustworthy and completely open about how it operates, or business owners may be leery of seeking funding from it.

Farm Credit Canada Programs for Ontario Businesses

You can obtain financing from FCC for a variety of situations, including:

Real property
Equipment
Inventory
Startups
Expansion
Customization
Diversification
Cash flow
Mergers and acquisitions
Venture capital

FCC splits its available funding programs into three different primary areas of agriculture, agribusiness, and food and beverage processing.

Agriculture

When seeking financing for an agricultural business, you have multiple options through FCC.

Credit lines: Receive a pre-approved revolving line of credit that you can use whenever needed.
Environmental solutions: Receive loans to make upgrades to your operation for things like changing over to renewable energy resources. When you make these changes, you may qualify for Ontario provincial and federal energy grants as well.
Equipment: Receive a loan to finance equipment you need for your farm, whether you are purchasing through a dealership or through a private sale.
Inputs: Receive a loan that you can use to purchase inputs like seed, fuel, and fertilizer. You may qualify to pay back the loan over an 18-month period.
Land and buildings: Receive a loan or a line of credit to purchase land or buildings. You can select temporary special options like deferred payments or interest-only payments.
Livestock: Receive a loan to purchase feeder cattle or breeding livestock with a competitive interest rate and a reasonable down payment.

Agribusiness

In terms of agribusiness options, FCC funds entities like crop input suppliers, equipment manufacturers, equipment dealers, feed processors, wholesale businesses, distribution businesses, and grain handling businesses. You can use these funds to:

Start: When starting a new agribusiness, FCC helps you set up a financing plan that matches your goals and expectations.
Grow: FCC works with business owners to finance things like expansions, investments in new technology, and purchases of more efficient equipment.
Manage: When you need advice about operating your agribusiness on a daily basis, including managing your finances, FCC has advice and educational materials available for you, in addition to lines of credit and loans.

Food and Beverage

FCC provides funding for a wide range of Canadian businesses involved in the food and beverage industry, including:

Abattoir and meat processors
Canned foods
Commercial bakeries
Ethnic and specialty foods
Food and beverage equipment
Food manufacturing and processing
Frozen foods
Grain and oilseed processing
Milled foods
Packaging
Seafood processing
Wholesale and distribution
Wineries and distilleries

How Much Can I Get from Farm Credit Canada?

Although receiving a loan from FCC may be an easier process than trying to go through a private, for-profit lender, FCC doesn’t give you unlimited funds.

The amount you can receive often will depend on what kind of down payment you can provide and what kind of collateral you have available, just like a traditional loan. And you do have to qualify based on your credit rating.

However, FCC makes the qualification process easier, even for large amounts of money. For example, when purchasing farm equipment, you could receive loans for almost any amount, including for more than $500,000.

Also, keep in mind these FCC collateral requirements:

If you borrow less than $100,000 from FCC, you do not need a down payment
If you borrow between $100,000 and $500,000, you need a 10% down payment
If you borrow more than $500,000, FCC will require a negotiated down payment amount

Ultimately, the amount you can borrow from FCC depends on what you need to purchase and the amount of credit for which you can qualify.

Farm Credit Canada Eligibility

As long as you are working in an ag-related business in Canada, you are eligible to seek funding from FCC. Certain loans and programs are limited to certain qualifying people, though. Some of those include:

Female entrepreneurs: Women looking to start or grow an ag-related business may qualify for the Women Entrepreneur Loan.
Indigenous entrepreneurs: Indigenous people hoping to start a business related to farming or food processing can qualify for financing.
New entrepreneurs: Those who are looking to start their own business in the agricultural industry may be able to qualify for a Starter Loan with a value of up to $150,000.
Sustainable farming: Those interested in transitioning to a more sustainable type of agriculture can receive payments through the Sustainability Incentive Program.
Transitioning out of farming: When you are ready to sell your farm or ag business, FCC offers a Transition Loan that the buyer to make payments over time. FCC then disburses the funds to you as the seller over time, too.
Young farmers: Farmers under the age of 40 can use the Young Farmer Loan to seek ag-related assets of up to $1.5 million.

Farm Credit Canada Applications: How Do I Apply?

You need to contact FCC directly to apply for your loan. There is no option for applying online. You have multiple options for reaching out to FCC:

Email: Send an email message to FCC customer service for any questions you may have.
Online portal: You can manage your FCC financing loan, including requesting increases to your credit limit, through the FCC online portal. This portal is only available to those who already hold FCC loans.
Telephone: Call the FCC customer service team at 1-888-332-3301.

You also can visit your local FCC office. At the FCC customer service page, enter your location. The website then will show any offices within a certain distance of your location.

Ontario has more than two dozen office locations. After you search for the offices, you can see their physical addresses and operational hours listed at the bottom of the page.

Tips for Maximizing Your Farm Credit Canada Funding

As you are researching your loan options from FCC, it’s important to make sure that any money you borrow will deliver the benefits you are seeking. Here are some tips to give you the best chance at figuring out how to maximize your funding.

Plan for cash flow: Spend time putting together a plan for your cash flow before obtaining loans, as this can help you figure out areas where you may need more financing and exactly how much you may need.
Understand your current profitability: Before seeking a loan from FCC, it’s helpful to understand things like your business’ liquidity, solvency, and profitability. FCC provides multiple financial ratio calculators to help you understand your financial situation before you seek additional loans.
Calculate your payments: FCC offers multiple online calculators that can show you the amount of interest you will pay and the monthly payments you have. You then can determine whether the loan is a good idea for fulfilling your plans.
Plan the project: To spend your loan money wisely, have a detailed project plan in place so you have an accurate estimate of expenses. Will you be hiring a contractor to do construction work? Will you do some of the work yourself? Do you need new equipment, or will you purchase some used equipment? What is the timeline for the project to begin adding to your profits?
Calculate ROI: With the plan in place and with your financial calculations in hand, you then can determine the return on investment (ROI) you’ll receive with the project. You may find that the potential ROI does not justify borrowing money and paying interest for the project.
Consider a second opinion: If you are unsure about the viability of your project, it never hurts to seek a second opinion from a trusted advisor or mentor.

Farm Credit Canada Loans: Programs Currently Available for Ontario Businesses

What is Farm Credit Canada?