How do I get a loan for an agricultural business in Canada?

A loan for an agricultural business starts with a different question than a general small business loan: which farm-specific program fits what you are buying or running? The federal small business program excludes farming businesses, so look at the agricultural programs and lenders below. Four routes are worth comparing before you apply.

The Canadian Agricultural Loans Act program

The Canada Small Business Financing Program guidelines say financing for farm related industries is available under the Canadian Agricultural Loans Act program. Agriculture and Agri-Food Canada says farmers can use an agriculture loan to establish, improve and develop farms. The federal guarantee is given to the lender, so the loan itself comes from a lender. The department’s examples include buying land and improving buildings.

The Advance Payments Program

This program is different in purpose. Agriculture and Agri-Food Canada describes it as cash advances against agricultural products you will produce or have in storage, repaid as you sell them. The department says it helps cover costs until the products sell; it does not present it as financing to buy a farm.

Farm Credit Canada

Farm Credit Canada says it lends to farmers, ranchers, growers and other primary food producers. Its financing pages list options for young farmers and for farm transition, which is relevant if you are taking over an existing operation. Ask what security and down payment it would expect for your file.

Provincial farm lenders

Alberta’s Agriculture Financial Services Corporation offers a Next Generation Loan for new, young and returning agricultural producers to establish their own farming operation, with fixed-rate term loans. That is Alberta’s program. For another province, ask its agriculture ministry what exists. Compare with how to get a loan to buy a business.