Farmland Financing
no fixed amount
Loan
Description:
The Farmland Financing provides term loans to new and expanding farms or to those involved in farmland succession within PEI. Finance PEI will provide two financing streams of which a farmer is eligible to apply under only one.
Comments on Funding:
Funding is:
– up to 90% – 100% of the purchase price of a maximum of 150 acres of farmland, at a fixed interest rate of 6% over a 5-year term, with blended principal and interest payments, or
– up to 80% of the purchase price of a maximum of 450 acres of farmland, with either: interest-only payments for a 5-year period at the prevailing interest rate, or a fixed interest rate of 6%, over a five-year term, with blended principal and interest payments.
There is a loan application fee in the amount equal to ½% of the amount of the proposed loan.
Continuous Intake
Eligibility:
Applicants must:
1. be any farmer that has an acceptable combination of five years post-secondary education in agriculture and/or work experience in a farming operation,
2. have/acquire a viable business venture with annual sales of at least $15,000 from agricultural commodities, supported by Income Tax Returns, in case of expansion/succession,
3. provide cash flow projections to indicate the following: i) required annual sales of $15,000 from agricultural commodities will be met, ii) adequate debt servicing to support the proposed land purchase, if new entrants,
3. have a valid Environmental Farm Plan and Soil Conservation Plan for the farmland being purchased,
4. put the land being financed as a first charge against the loan, and the shareholder(s) must provide a Personal Guarantee,
5. be a Canadian citizen and a permanent resident of PEI.
Application Steps:
Applicants must:
1. complete the loan application, a Business Plan prepared by a qualified Chartered Accountant and including 3 years of cash flow projections and 3 years of historical financial statements (if applicable), appraisal by an Accredited Appraiser,
2. submit the completed application to an Account Manager with Finance PEI. The Account Manager will conduct an interview with the applicant(s) to discuss the business proposal and the next steps required to determine eligibility.
Documentation Needed:
Applicants must submit the following:
1. a completed loan application,
2. a Business Plan prepared by a qualified Chartered Accountant including 3 years of cash flow projections and 3 years of historical financial statements, if applicable,
3. appraisal by an Accredited Appraiser.
About the author
Maurice