Canadian Agricultural Loans Act (CALA) Program
Establish, improve, or expand
Key Benefits of the CALA Program include:
- Preferred Interest Rates - you can choose from a fixed or variable rate options
- Lower Down Payments - 20% for established producers and 10% for beginning farmers
- Flexible Repayment Options
- No Prepayment Penalties (Fixed Rate Mortgages excluded)
Farmers eligible for a CALA loan guarantee include:
- Existing farmers
- Beginning/start-up farmers (i.e. less than 6 years of farming)
- Farmers taking over the family farm
- Part-time farmers
- Agricultural co-operatives with a majority (50% + 1) farmer membership
Eligible loan purposes include the following that must be used in the applicant’s farming operation:
- Building/ Construction
- Shares in a farming operation
A detailed list of eligible loan purposes is available on the program website.
If a purchase has already been made, a farmer has 60 days to receive funding from a lender for a CALA loan.
CALA loans are limited to:
- $500,000 for land and the construction or improvement of buildings.
- $350,000 for all other loan purposes.
The maximum aggregate loan limit for any one borrower is $500,000 - which simply means a producer can have more than one CALA loan, however, the total amount of loans issued under the CALA program can not exceed $500,000.
The maximum aggregate loan limit for agricultural cooperatives, is $3 million, with the Minister’s approval.
For example: If a farmer gets a CALA loan for $300,000 for a tractor, he can still access up to $200,000 for land purchase or building repair, or $50,000 for another implement and $150,000 for land purchase or building repair.
Preferred Interest Rates
As stipulated in the program, CALA loans enjoy preferred interest rates. Producers can choose between:
- a floating rate of prime rate plus 1%, or
- a fixed term rate WCU residential mortgage rate, for a comparable term, plus 1%.
The maximum term for loans is 10 years, with 15 years for loans on land purchases.
Lower Down Payments
We can lend up to 80% of the market value of the security offered. Beginning farmers may borrow up to 90%.