Frequently asked questions
1. How do you qualify as a borrower for a Canadian Agricultural Loans Act (CALA) loan guarantee?
The borrower must meet the definition of farmer and farming and the purpose of the loan must be eligible under the program. An agricultural co-operative must have a membership of at least 50% +1 farmer members and the loan must be for the processing, distribution or marketing of the products of farming.
2. Do part-time farmers qualify?
Yes. CALA covers part-time farmers. The definition, simply put is, an individual, partnership, corporation, or co-operative association that is engaged in or intends to be engaged in farming in Canada, for the purpose of making a profit.
3. Do beginning and start-up farmers qualify?
Yes. In order to qualify, the borrower must be engaged in or intend to be engaged in farming in Canada, for the purpose of making a profit.
4. Does quota or an operating loan qualify under the program?
No they are not eligible purposes under the CALA. However, the Advance Payments Program (APP), may be helpful to farmers. The APP provides farmers with cash advances, based on the value of their agricultural production, which could be used for these purposes.
5. Can a loan be financed under the CALA for the purchase of shares in a farm or farming operation?
Yes. A loan for the purchase of shares in a farm or farming operation can be financed under the CALA for up to $350,000.
6. Can loans be refinanced/consolidated?
Yes, provided the original purposes of the loans are eligible under the CALA. The consolidated/refinanced amount is the total of the outstanding principal balances of the loans to be consolidated/refinanced to a maximum of $350,000. These loans can be amortized for up to ten years. If the loans were not previously registered with the CALA, they can still be consolidated/refinanced; however, this must be done through a new lender.
7. Do greenhouses qualify under the CALA Program?
Yes, provided the agricultural product being grown is eligible under the program. Eligible products can include those grown in hydroponic operations.
8. How do you apply for a CALA loan?
The first step is to approach your lender. Your lender will go through its loan application process and determine the financing best suited to your needs, which may include a loan under the CALA program.
9. Does the CALA Program offer online loan applications, and, if so, how do I do this?
Yes, the CALA does accept online applications, from lenders. If you are a farmer, you must go through a lender to receive a loan under the program. It is then up to the lender to decide to register the loan with the CALA Program through either the CALA Online Loan Registration System or by mailing in the forms and registration fee. For those lenders who are not registering loans online and would like to, please contact the CALA Program to be set-up to do so.