Advance Payments Program: 1. What this program offers

1. What this program offers

The APP is a federal loan guarantee program which provides agricultural producers with easy access to low-cost cash advances.

Under the program, you can access up to $1,000,000 in total advances based on the value of the eligible agricultural products you will produce or that you have in storage.

Normally, the Government of Canada pays the interest on the first $100,000 of your advance.

• For the 2024 and 2025 program years, the first $250,000 is interest free
• For canola advances specifically, the first $500,000 is interest free for the 2025 and 2026 program years

You repay your advance as you sell the agricultural products, with up to 18 months to fully repay the advance for most commodities (up to 24 months for cattle and bison).

APP advances can provide you with cash flow to meet your financial needs until you are able to sell your agricultural products. The program can provide marketing flexibility by allowing you to sell your agricultural products based on market conditions rather than the need for cash.

APP advances are available through participating producer organizations, that is, APP Administrators, across Canada.

How much you can receive

Under the APP, you may be eligible to receive up to $1,000,000 per program year, with:

• the federal government paying the interest on the first $250,000 of:
  • your advance for the 2024 and 2025 program years
  • the first $500,000, for canola advances, for the 2025 and 2026 program years
• preferential interest rates on the remainder

Your cash advance is calculated based on up to 50% of the anticipated market value of the eligible agricultural products that you will produce or that you have in storage.

While you can have more than one advance outstanding, including more than one interest-free advance, you cannot have more than $1,000,000 outstanding at any one time.

What you need as security for an advance

Your APP advance must be secured. The security required will depend on the type and state of the agricultural product at the time you apply.

• The agricultural product on which the advance is based is always required as security.
• For advances on agricultural products that are in production or are non-storable and for advances on animals or animal products, additional security is required. This includes the potential proceeds from an eligible business risk management program (for example, AgriInsurance, AgriStability or Farm Income Stabilization Insurance in Quebec) and/or another acceptable form of security.

In most cases, the advance amount you are eligible to receive will be limited by the value of the security you provide.

If you are declared in default, the security, including assigned program payments, may be used to pay off your advance.

For more information on acceptable forms of security, you should contact your APP Administrator.