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Frequently Asked Questions - Interest Rebate Program On Feeder Association Loans
The APP has a provision that will rebate the eligible portion of interest on Feeder Association loans to eligible producers. The loans are treated no differently than any other feeder loan however the producer needs to fill out an application and the secretary will be required to complete a number of steps to complete the rebate. The “program year” is also April 1 through Sept 30 of each year.
1. Do cattle on an existing FA contract qualify?
A - Yes. However it may be advantageous to the producer to put calves on the program later in the year to gain maximum benefit.(After April 1)
2. I have a cash advance. Do I also qualify for the Interest Rebate
Program?
A – Yes, to a maximum of $100,000 interest free benefit on all commodities –
(cattle, wheat, canola, honey etc.) per program year.
3. Who qualifies?
A – Any Individual, Partnership, Joint Venture or Corporation is eligible to apply for the Interest Rebate Program.
4. Do I need to be enrolled in the Agri-Stability program for a rebate?
A - No. That is a major benefit of the Feeder Association rebate program- Agri-Stability is not required.
5. How and when is payment of administration fee on the rebate program made? Since the rebate is available on existing loans it can not be added to a contract? Is the applicant required to deliver a cheque?
A - Normally the fee will be added to the feeder agreement at the start of the loan when the APP Rebate agreement is signed. This fall there are some Feeder loans already in place. In those cases a member will have to make suitable arrangements with the Association to pay the admin. fee. Preferably it should be paid when the APP Rebate agreement is signed. Remember, the admin fee must be submitted to Feeder Assoc. Prov. Office monthly.
6. Is the interest rebate cheque from Barrhead payable to the member or to the Feeder Association?
A - The “lump” cheque will be paid to the local association for disbursement to the appropriate members.
7. Since some contracts could receive their rebate before the Feeder Association contract has to be paid out, and it is possible that there may be a short fall or default on the Feeder Association contract, is it possible for cheques to be made out to the Feeder Association and then on successful completion of the contract, for the Feeder Association to issue the rebate or conversely return the money to Barrhead? This scenario would probably only happen on the March 31 dead line.
A - It must be policy to not pay any rebates until the loan is repaid. In the event loans run past the program year of Sept. 30 the interest rebate must be held by the Association until the loan is repaid. Any loans that are overdue or in “default” will not be eligible for rebate and rebate funds must be returned to Barrhead.
We can only submit a claim if the producer has paid out infull, we will not process any rebate claims until they are paid out in full.
8. When my loan is paid off when can I expect my interest rebate.
A – Processing of rebates occurs the 15th of month after you payout your contract with your Local Association. ie if you payout in December your claim will be submitted by January 15. Payouts will occur approximately 3 to 4 weeks after the claim has been submitted.
9. Why should I take the feeder loan rebate instead of the simple cash advance.
A - There are several reasons.
-The advance is only a percentage of the calf value, where the FA loan can be 100% of calf value.
-The interest benefit is actually slightly more on the Rebate program and you get to use all your money to meet commitments sooner.
- In some cases the advance can be used in spring and rolled into a Feeder Loan in fall to maximize cash flow and APP benefits.
10. The Interest Calculations are complex, we are struggling with the process, can we get help?
A - The Feeders Association of Alberta has developed software to assist in calculating the estimated rebate a producer will receive. As well you are free to contact the Interest Rebate Administrator at any time for more help.
If you have further questions please call the Provincial Office 1-844-FEEDERS |
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