Farm Credit Canada (FCC) has announced updates to its FCC Transition Loan to facilitate the transfer of farm business assets between both buyers and sellers.
The new terms allow disbursements to the seller over a period that extends to 10 years. The loan is available for farms, agribusiness or food businesses going through changes in ownership, be it within or outside the family, says FCC.
Under the terms of the lending product, sellers receive guaranteed full payment of the sale proceeds by FCC; a customized payment schedule for up to 10 years; and the opportunity to support a next generation entrepreneur. Buyers benefit as the loan does not require upfront capital for a down payment; allows flexibility to choose between improving cash flow or building equity; and includes FCC’s AgExpert software.
“Transferring the family farm or business can be a stressful thing to manage, but the support of the FCC Transition Loan can help address the financial barriers folks experience,” says Heath MacDonald, federal minister of agriculture and agri-food. “It also creates opportunities for people looking to start or expand their operations, making it a real investment in the future of our agricultural sector.”
Canada’s agriculture and food system is sitting on more than $50 billion in farm assets expected to be transferred in the next 10 years, says FCC.
“One of the most consistent challenges faced by Canadian producers is transitioning their operations to either family or an outside qualified buyer. It is complex, nuanced, and emotional,” says Justine Hendricks, FCC president and CEO. “For our part, we’ve been working hard to build a loan product that makes transition and sale easier for both buyers and sellers. Whether the buyers are new to the sector or not, this product is focused on delivering peace of mind and flexibility to Canadian agriculture and agri-food producers. It’s designed specifically with affordability and success in mind.”
For more information and a loan calculator, visit www.fcc.ca/transitionloan.
