Advanced Payment Program Borrowing limit upped to $1 million

Growers who have been watching the debacle with China over canola will be aware that this issue has triggered an increase in the maximum amount of funding available.

Brent Mooney, Golden Spruce Nurseries, has been talking to Jaye Atkins at APP, as he had several queries about the program :

“Are the new limits triggering more rules, checks and balances or is it simply as it appears just a raise in limit?

Financials will now be required of all commodities for loans over $400k.  Previously only a few sectors like Greenhouse.

  1. AAFC is funding more inspections for loans over $400k.  Golden Spruce have had two inspections in 6 years using both Greenhouse & Trees and Shrubs programs so even if they double it they won’t be crawling all over us by the looks of it.
  2. There does not seem to be a change in the Stress Testing.  For example, the Calculated Reference Margin based on Average Reference Margin plus a % of Allowable Expenses seems not to have changed.
  3. ACC has issued a new 1 page abbreviated amendment form requiring all new shareholder sigs that is an addendum to an existing current loan if you have one active like ourselves.
  4. $100K is still interest free with the balance up to $900K at BMO Prime, currently 3.95%.  (Canola gets $500k interest-free).

5. If a producer does not qualify themselves, AAFC now allows a third party guarantor. The guarantor has to submit a birth certificate and financial statement; the guarantor requires a positive equity position on the balance sheet and a profitable financial statement.

Please see the attached information sheet for more details and contact information.