January 1, 2012

Opportunity for growers:

Low-cost financing offered through Ag coalition


In today's economy, as operating costs continue to increase it is becoming more of a challenge to manage finances and capital budgets. Growers continue to look at ways to reduce costs and try to spread savings further to ensure their business is a success. ACC Farmers' Financial recognizes that the availability of low cost and accessible financing is essential to remain competitive in the industry.

ACC administers loans for several thousand agricultural products across different sectors of agriculture, and is a nationally appointed administrator of Agriculture and Agri-Food Canada's Advance Payments Program. Loans are available up to $400,000, with the first $100,000 interest-free and up to $300,000 at the prime rate.

Since 2008, ACC has helped tailor the Advance Payments Program (APP) to accommodate the needs of the greenhouse and nursery landscape industries. The loan programs that exist today were designed to help growers with both production and marketing and to give easier access to cash advances for commodities being grown and sold within the program timeline.

In 2009 when the program was introduced to the nursery sector, a limited line of inventory was included and only a small number of items were available for financing in a few provinces. The 2011 program is now available in all provinces for thousands of nursery products grown across Canada. ACC is currently offering the fall cycle of this program, where growers that do not participate in Agristability are given the opportunity to access the same low-cost financing available to others in the spring.

The 2012 program for greenhouse vegetables, cut flowers, and potted plants has undergone major improvements to better accommodate the needs of the growers. The program will now run from November 2011 through to April 2013 and includes both higher advance rates and a more accommodating repayment schedule, allowing growers greater flexibility with their cash flow.

Aside from the fall cycle of the program for nursery products, growers applying for financing under the Advance Payments Program are required to be enrolled in Agristability. Calculations are based on the number of products to be harvested and sold within the program timeframe, and the eligible loan limit is the lesser of the government portion of a growers' Agristability reference margin, or the specific amount based on production and advance rates. For example, if the production eligibility totalled $400,000 and your Agristability reference margin was $610,000, you would be eligible to receive the full $400,000 because the government portion would not limit your eligibility (610,000 x 66.5% = $405,650). However, if your Agristability reference margin were $430,000, you would only be eligible to receive $285,950 because you would be capped by the reference margin ($430,000 x 66.5% = $285,950).

ACC Farmers' Financial understands how important it is for producers to fully assess their financial situation each year and plan how to improve cash flow as they move forward. With affordable financing solutions that are almost never offered by traditional lenders, the services provided by ACC are a great complement to other financing programs within the agricultural industry.

If you are interested in the services available through ACC Farmers' Financial and would like additional program information, please contact a lending officer at 1-888-278-8807 or visit www.accfarmersfinancial.ca.
Ashleigh Benedict is a marketing officer with ACC Farmers' Financial.