Advance Payments Program: Step 1. What this program offers

Step 1. What this program offers

Intake period: Open

The application intake period for the program is open.

Additional increase to the interest-free limit for 2023

On May 10, 2023, the Minister of Agriculture and Agri-Food announced a temporary increase to the interest-free limit for advances under the Advance Payments Program (APP). The change will help agricultural producers with significant financial challenges, including high input costs and rising interest rates.

Following an increase to the interest-free limit made in 2022, bringing it from $100,000 to $250,000 for the 2022 and 2023 program years, it has been further increased to $350,000 for the 2023 program year. This is the portion of advances on which the Government of Canada pays the interest on behalf of producers. This additional increase to the interest-free limit will generate more savings for farmers so they can maintain production to sustain their livelihoods through challenging times.

Additional information on this initiative can be found at Government of Canada further increases interest relief to help producers manage financial challenges or by contacting an APP Administrator.

The Advance Payments Program 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. The Government of Canada pays the interest on the first $100,000 of your advance (the first $250,000 for 2022 and 2023). You make repayments to the 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 30 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 $100,000 per program year (the first $250,000 for 2022 and 2023)
• 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 [ASRA] 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 Advance Payment Program Administrators.