Canadian Agricultural Loans Act program

“Agriculture and Agri-Food ”

SVG
SVG

$3,000,000.00

Maximum Eligible Amount

Repayable Contribution

Fund Type

The Canadian Agricultural Loans Act (CALA) Program is a loan guarantee program designed to increase the availability of loans to farmers and agricultural co-operatives. Farmers can use an agriculture loan to establish, improve, and develop farms, while agricultural co-operatives may also access loans to process, distribute, or market the products of farming.

Program objectives

The program aims to:

  • help lenders incorporate CALA Program loans into their normal lending practice
  • provide a government guarantee on eligible loans to farmers and agricultural co-operatives
  • support farmers in accessing agricultural credit to grow their operations

Funding

Under this farm financing program, the federal government guarantees, to the lender, repayment of 95% of a net loss on an eligible loan issued.

The maximum aggregate loan limit for any one farm operation is $500,000.

The maximum aggregate loan limit for agricultural co-operatives is $3 million, with approval from the Minister of Agriculture and Agri-Food.

Loans are limited to a maximum of:

  • $500,000 for the purchase of land and the construction or improvement of buildings
  • $350,000 for all other loan purposes, including consolidation/refinancing

Example of a CALA Program loan

If you get a CALA Program loan for $300,000 for a tractor, you can still access up to $200,000 for land purchase or building repair. Alternatively, you could borrow $50,000 for another implement and $150,000 for land purchase or building repair.

The Canadian Agricultural Loans Act (CALA) Program is a loan guarantee program designed to increase the availability of loans to farmers and agricultural co-operatives. Farmers can use an agriculture loan to establish, improve, and develop farms, while agricultural co-operatives may also access loans to process, distribute, or market the products of farming.

Program objectives

The program aims to:

  • help lenders incorporate CALA Program loans into their normal lending practice
  • provide a government guarantee on eligible loans to farmers and agricultural co-operatives
  • support farmers in accessing agricultural credit to grow their operations

Funding

Under this farm financing program, the federal government guarantees, to the lender, repayment of 95% of a net loss on an eligible loan issued.

The maximum aggregate loan limit for any one farm operation is $500,000.

The maximum aggregate loan limit for agricultural co-operatives is $3 million, with approval from the Minister of Agriculture and Agri-Food.

Loans are limited to a maximum of:

  • $500,000 for the purchase of land and the construction or improvement of buildings
  • $350,000 for all other loan purposes, including consolidation/refinancing

Example of a CALA Program loan

If you get a CALA Program loan for $300,000 for a tractor, you can still access up to $200,000 for land purchase or building repair. Alternatively, you could borrow $50,000 for another implement and $150,000 for land purchase or building repair.

Step 2. Eligibility

Check if you meet the criteria to apply.

Eligibility checklist

You must meet all of the following criteria to be eligible for this government farm loan.

  • You're one of the following:
    • existing farmer
    • beginning farmer (less than 6  years of farming)
    • start-up agribusiness
    • farmer taking over the family farm
    • part-time farmer
    • agricultural co-operatives with a majority (50% + 1) farmer membership
  • Your farm operation must meet the definition of “farmer” and “farming” as defined by the Canadian Agricultural Loans Act (the Act).

Farmer refers to one of the following that is, or intends to be, engaged in farming in Canada:

  • an individual
  • a partnership
  • a corporation
  • a co-operative association

Farming refers to:

  • the production of field-grown crops, cultivated and uncultivated, and horticultural crops
  • the raising of livestock, poultry, and fur-bearing animals
  • the production of eggs, milk, honey, maple syrup, tobacco, fibres, wood from woodlots, and fodder crops
  • the production or raising of any other prescribed thing or animal

Business loans for small business

If you’re not a farming operation, and don’t meet the eligibility criteria above, but you operate a small business or start-up in Canada and you want a business loan, please visit the Canada Small Business Financing Program and AgPal to browse through programs, services and more.

Eligible loan purposes

Your farming purpose(s) must be eligible under the Act.

The following are examples of eligible loan purposes.

Real property purposes

  1. Purchase of land
  2. Construct, repair, alter, or add to any building or structure on a farm
  3. Purchase, transport, and install complete or partially complete structures and completion of the installed structures, where necessary

Other loan purposes

  • Purchase, installation, alteration, major overhaul, or major repair of:
    • tools, implements, apparatus, and machines
    • machinery and apparatus for the generation or distribution of electricity
  • Purchase of livestock, including:
    • horses and other equines
    • cattle, sheep, goats and other ruminants
    • swine, poultry, bees and fur-bearing animals
    • game birds, ostrich, emu and rhea
  • Build fencing or works for drainage
  • Plant trees and shelter belts to prevent soil corrosion and erosion
  • Purchase and plant fruit trees, Christmas trees, ginseng, and maple trees for maple syrup production where the cost is $2,000 or more
  • Consolidate or refinance loans under the CALA Program, including:
    • loans originally granted by the lending institution where the loans were first issued
    • loans issued by a third party, provided they were initially made for purposes eligible under the CALA Program
  • Purchase of shares for inter-generational farm transfers
  • Purchase of CALA Program registration and administration fees
  • Costs to get security on existing assets, including premiums for life and/or disability insurance
  • Cannabis production
  • Vertical farming
  • Leasehold improvements
  • Land improvements

Ineligible loan purposes

The following are examples of ineligible loan purposes.

  • Improving the family dwelling
  • Purchasing quotas of any kind
  • Operating loans

The lists above are not exhaustive



Image Description Log in with Google
OR
Get Started to Apply

Latest Articles