Horticulture Economic Indicator #37 is $1.5M ( new farmer loans)

As MNP's Leader for Horticulture and Irrigation, welcome to my series on important economic facts for the Canadian horticulture industry.

There has definitely been a renewed interest in farm succession planning due to Bill C-208 and worries about future tax changes.?Having access to capital for the next generation is always a critical success factor in developing a good succession plan.?New farmer loans with more flexible terms and lower interest rates could be another tool in your tool box when transitioning farming assets to the younger generation. In my experience, there are no cookie cutter transition plans; each plan is unique to the family and their objectives. It is important to engage the right professionals to guide you through this important process.

One important part of the transition process is accessing capital. For example, FCC has expanded its lifetime maximum amount for the Young Farmer and Young Entrepreneur loans from $1 million to $1.5 million (this is this week's economic indicator).?This Young Farmer Loan Program?offers qualified producers, who are under 40, loans of up to $1.5?million to purchase or improve farmland and buildings.?The loan includes features to support their long-term success, including?lower lending rates.

Other banks also offer similar products like this, so it is important to look around for one that meets your needs. New farmer loans can save a lot in interest costs; but also can provide additional flexibility when a new farmer needs it most (at the beginning).

Additionally, it is important to consider having two lenders for your farm that work well together.?This helps provide a check and balance when it comes time to renew loans or to buy new land or equipment.?FCC is an example of a collaborative lender as they don't provide day to day banking services and are more than willing to “play nicely” with other banks.?If you are with only one bank, consider whether you could benefit from having more than one lender to ensure you always have access to financing. The hard times will come and you will be happy that you have more than one banking option.

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