Farm Credit Canada (FCC) has doubled the amount of credit available under the FCC Young Farmer Loan.
The credit limit will be increased to $1 million from $500,000.
“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.”
FCC has also lowered the possible minimum down payment required for a young farmer loan to 20% from 25% of the value of the loan, which supports the purchase or improvement of farmland and buildings.
“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.”
FCC will continue to offer a variable lending rate at prime plus 0.5%, 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.
In 2015-16, FCC overall approved more than $2.6 billion in financing, including the Young Farmer Loan, to farmers under age 40, representing more than one-quarter of the $9 billion in disbursements last year to help customers expand or start their operations.