Farmland Financing

The Farmland Financing Program is available to support eligible farmers; new and expanding or those involved in farmland succession within Prince Edward Island.

What type of financial assistance is available?

Finance PEI provides two financing programs (Acreage Acquisition Loan and Young Farmers Low-Interest Loan) to support the agriculture sector. Of these programs, a farmer is eligible to apply only under one. 

Financing is eligible on farmland only; woodland, barns or other structures or equipment are excluded.

Acreage Acquisition Loan Program

The Acreage Acquisition Loan Program has two streams.

Stream 1: For farmers looking to acquire up to 150 acres of farmland, they are able to access term loan financing up to 100% of the purchase price at a fixed interest rate of 6% over a five-year term, with blended principal and interest payments.

Stream 2: For farmland acquisitions of up to up to 450 acres of farmland, farmers are eligible for term loans financing up to 80% of the purchase price of the acreage, with either:

• interest-only payments for a five-year period at the prevailing interest rate, or
• a fixed interest rate of 6%, over a five-year term, with blended principal and interest payments

Young Farmers Low-interest Loan Program

This funding program aims to help new entry or farmland succession applicant between the ages of 18-39 access low interest financing for farming infrastructure

• To support logistical operations, this stream will include financing on barns and other structures if the applicant can prove that the structures will directly help with the operation of the farm
• Individual loans to be capped at $1 million, at a fixed rate of 3% for an initial five-year term, amortized over a 20-year period

Eligibility

For an applicant to be eligible for assistance, the following criteria must be met:

• Be a Canadian citizen and a permanent resident of PEI;
• Have an acceptable combination of five years of post-secondary education in agriculture and/or work experience in a farming operation;
• A business plan prepared by a qualified chartered accountant that includes:
  • Income tax returns that demonstrate annual sales of at least $15,000 from agricultural commodities for farming operations expansions or succession planning
  • New entrant must also include cash flow projections to indicate the following:
    • required annual sales of $15,000 from agricultural commodities will be met,
    • adequate debt servicing to support the proposed land purchase
  • A valid environmental farm plan and soil conservation plan for the farmland being purchased;
• Land being financed must be available to be taken as a first charge against the loan;
• Shareholder(s) must provide a personal guarantee; and,
• A satisfactory credit rating and must not have outstanding debt obligations on file in the Province’s Central Default Registry.

Application Process

Applicants are to submit the following in support of their application:

• Submit the completed application for financial assistance and all requirements to Finance PEI.
• An Account Manager will conduct an interview with you to discuss your business plan and the next steps to determine eligibility.

Other information

• Finance PEI has established a $10 million investment portfolio for this financing program
• 25% of this financing program is earmarked for the Young Farmers Low-Interest Loan Program 

For More Information

If you have any further questions, they may be directed to:

Kristin McInnis, Senior Financial Analyst
kcmcinnis@gov.pe.ca

Kelly MacDonald, Account Manager
krmacdonald@gov.pe.ca 

Address: 
Finance PEI, Commercial and Resource Lending                      
98 Fitzroy Street, 2nd Floor
Charlottetown, Prince Edward Island
C1A 1R7 Canada

Telephone: (902) 368-6200

Facsimile: (902) 368-6201

Website: http://financepei.ca