A new initiative from Farm Credit Canada could help 1,000 Canadians start or expand their farm operations.
President Greg Stewart revealed details of FCC’s new $500 million Young Farmer Loan program at a news conference today on a farm near Saskatoon.
Under the program, FCC will offer loans of up to $500,000 for purchase or improvement of farmland and buildings.
“This is just another program that we’re trying to launch to help support young farmers even more, given that land prices are going up,” said Stewart. “It’s a capital intensive business.”
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The loans will target producers younger than 40 and come at closed variable rates of prime plus 0.5 percent and special fixed rates, with no loan processing fees, which Stewart said could total $2,500 on a $500,000 loan.
“It’s a very attractive rate to allow someone to build up their credit history and their credit file and allow them to stand on their own two feet,” he said.
With FCC lending $1.6 billion to young producers in 2011, Stewart expects the program to reach its cap within the calendar year, with interest coming from young farmers conducting an intergenerational transfer for the first time or producers looking to grow their business.
“This may be the opportunity for those who were on the fence,” he said. “It’ll be a mix of everybody.”
Almost one- third of FCC’s loans were given to young Canadian producers in 2011, said Stewart.
