Farmland Financing Program

Overview of the Farmland Financing Program program:

The Farmland Financing is available to eligible farmers; new and expanding or those involved in farmland succession within PEI. Finance PEI will provide two financing streams of which a farmer is eligible to apply under only one. Term loan to finance up to 90% - 100% of the purchase price of a maximum of 150 acres of farmland, at a fixed interest rate of 6% over a five-year term, with blended principal and interest payments; or Term loan to finance up to 80% of the purchase price of a maximum of 450 acres of farmland, with either: interest-only payments for a five-year period at the prevailing interest rate, or a fixed interest rate of 6%, over a five-year term, with blended principal and interest payments *Financing is eligible on farmland only; woodland, barns or other structures or equipment are excluded. *Finance PEI has established a $10 million investment portfolio for this support..

Benefits of the Farmland Financing Program program:

• Finance PEI can offer farmers their choice of one of the following term loans with blended principal and interest payments:
• A five-year loan of up to 90-100% of the purchase price of a maximum of 150 acres of farmland at 4% interest
• A five-year loan of up to 80% of the purchase price of a maximum of 450 acres of Farmland at 4% interest.
• Loan funds must be used to purchase farmland and may not be used to purchase woodlands, barns, or farm equipment.

Eligibility criteria of the Farmland Financing Program program:

• Any farmer that has an acceptable combination of five years post-secondary education in agriculture and/or work experience in a farming operation
• Expansion/Succession - the farming operation must be a viable business venture with annual sales of at least $15,000 from agricultural commodities, supported by Income Tax Returns
• New Entrant - cash flow projections to indicate the following: i) required annual sales of $15,000 from agricultural commodities will be met, ii) adequate debt servicing to support the proposed land purchase
• You must have a valid Environmental Farm Plan and Soil Conservation Plan for the farmland being purchased.
• The land being financed must be available to be taken as a first charge against the loan.
• The Shareholder(s) must provide a Personal Guarantee
• You must be a Canadian citizen and a permanent resident of PEI