Canadian Agricultural Loans Act
Provided by Agriculture and Agri-Food Canada.
The Canadian Agricultural Loans Act (CALA) is a loan guarantee program that provides loans to farmers (existing and new).
What is Eligible?
Eligible loan purposes include equipment, building/construction, land, livestock and shares in a farming operation.
Where to apply?
A number of financial institutions offer CALA loans. Farmers pay a fee (0.85% of the amount of the loan) to have the loan registered and guaranteed under CALA. The lender may also charge an administrative fee of 0.25% of the loan up to a maximum of $250.
The maximum loan is:
- $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. As an example, if a producer 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.
- Interest to be paid on a floating rate is a maximum of the lender's prime rate plus 1%.
- Interest to be paid on a fixed term rate is a maximum of the lender's residential mortgage rate, for a comparable term, plus 1%.
15 years for land purchases. Lenders may amortize loans for longer than 15 years provided a balloon payment is scheduled for the loan at the end of the 15 year period. The remaining loan amount could then be refinanced under CALA for a further 10 years.