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Canadian Agricultural Loans Act Program

 
 
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Program Information
 
 
 

Agency:

Agriculture and Agri-Food Canada

For Further Information Contact:

Tel: 1-866-367-8506
Web: http://www4.agr.gc.ca/AAFC-AAC/display-afficher.do?id=1288035482429&lang=eng
Email: fgp-pgf@agr.gc.ca
 
Eligibility
Canadian farmers and farmer-owned cooperatives
 
 

 
Program Details
 
 
  Agriculture and Agri-Food Canada offers the Canadian Agricultural Loans Act (CALA) program which is designed to help beginning farmers (farming less than 6 years), existing farmers, and agricultural co-operatives with their financing needs. Under the CALA, the federal government guarantees loans issued by financial institutions, which enables borrowers to benefit from advantageous interest rates, lower equity requirements, and flexible repayment terms.


The maximum amount a farmer may be eligible for is $500,000 for land and equipment combined. The total loan limit for real property (land and buildings) is up to $500,000, while the total loan limit for all other purposes, such as equipment, is up to $350,000.

Beginning farmers require a lower down payment and can finance up to 90 per cent of the asset being purchased. Existing farmers can finance up to 80 per cent of the asset being purchased. The maximum interest rates that can be charged by the lender on a loan registered under the CALA is the lender’s prime plus 1 per cent for variable term loans and the lender’s comparable residential mortgage rate plus 1 per cent for fixed term loans. Repayments must be made at least on an annual basis, and the repayment period for land is up to 15 years, and for any other purpose is up to 10 years.

In terms of fees payable by a farmer, the registration fee is 0.85 per cent of the loan amount, and the maximum administration fee a lender can charge is limited to 0.25 per cent of the loan amount for loans under $250,000, and to 0.1 per cent for loans over $250,000.

To be considered for a CALA loan, a borrower has to contact a financial institution which will review the loan application and decide eligibility under the CALA program.

You can visit the CALA’s website for further information on the program, or contact the CALA program by email at fgp-pgf@agr.gc.ca or by telephone at 1-866-367-8506.





 
 
 
 
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Last Reviewed/Revised on March 7, 2018.