Advance Payments Program: Step 1. What this program offers
Increase to the APP advance limits for 2019
Amendments made to the Agricultural Marketing Programs Regulations increase loan limits from $400,000 to $1 million for all producers on a permanent basis, and increase the interest-free portion of loans on canola advances from $100,000 to $500,000 in the 2019 program year under the APP. Producers of all other commodities can continue to receive up to $100,000 interest-free.
Print this fact sheet for use at events and meetings to promote the program.
Step 1. What this program offers
The Advance Payments Program (APP) is a federal loan guarantee program which provides agricultural producers with easy access to low-interest cash advances.
Under the program, producers can access up to $1,000,000 per program year in advances based on the value of their agricultural product, with the Government of Canada paying the interest on the first $100,000 advanced to a producer. Advances are repaid as the producer sells their agricultural product, with up to 18 months to fully repay the advance for most commodities (up to 24 months for cattle and bison).
As a producer, an APP advance can help you to meet your financial needs, such as farm input costs, immediate financial obligations, and product marketing costs. It can also allow you to make the decision to sell your agricultural products based on market conditions rather than the need for cash flow.
APP advances are available through 35 participating Producer Organizations, that is, APP Administrators, across Canada.
How much you can receive
Under the Advance Payments Program (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; and
- preferential interest rates on advance amounts over $100,000.
Your cash advance is calculated based on up to 50% of the anticipated value of the eligible agricultural products that you are producing or have in storage. You cannot have more than $1,000,000 in advances outstanding at any one time.
What you need as security for an advance
Your 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 one or more of the potential proceeds from a relevant business risk management program (AgriInsurance, AgriStability or Farm Income Stabilization Insurance [ASRA] in Quebec) and/or another acceptable form of security.
The advance amount you are eligible to receive will be limited by the level of security you are able to 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.
In addition to guaranteeing the repayment of APP advances and paying the interest on the first $100,000 advanced to each producer per program year, Agriculture and Agri-Food Canada (AAFC)’s Financial Guarantee Programs Division (FGPD) is responsible for providing federal oversight by working together with APP Administrators to ensure that the program is administered in a manner that:
- is efficient with respect to the cost to government
- is focused on providing benefit to Canadian producers
- respects the annual Advance Guarantee Agreements, Program Guidelines, the Agricultural Marketing Programs Act and its Regulations
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