The Canadian Canola Growers Association is now accepting applications for the 2022 Cash Advance Program.
Dave Gallant is the CCGA's Director of Finance and Operations says with the low interest rate farmers looking for options to finance their spring inputs might want to give a cash advance a second look.
"Farmers can apply for cash advances through the federal government program, with the first $100,000 interest-free. There is no fee at CCGA for a cash advance, and the overall limit of the program is a million dollars. So on the remaining $900,000 CCGA loans that to the farmers at prime minus 3/4 of a per cent. So today prime is at 2.45 per cent, which means on the extra $900,000 the farmer would pay 1.7 per cent interest. Which gives you a blended rate of 1.5 per cent on a million dollars."
He says given that market values for commodities are so much higher than they were last year, the federal government has raised the cash advance rates.
"So for example, canola this year is $363.75 a tonne, last year was $252 a tonne. That means that for the same amount of grain or the same number of acres, farmers are likely to be able to receive anywhere from 25 to 35 per cent more money for their cash advance than they did in the prior year."
He notes the Cash Advance Program covers about 55 different commodities including all grains, oilseeds, pulses, specialty crops, livestock, cattle, bison, sheep and goats as well as honey.
Farmers wanting to learn more about the cash advances offered through CCGA can call 1-866-745-2256 or visit CCGA’s website.
The Advance Payments Program is a federal loan program administered by CCGA.