New Brunswick Agriculture Loan and Loan Guarantees

Program Description

New Brunswick's complementary farm lender. The Department of Agriculture, Aquaculture and Fisheries provides repayable loans and loan guarantees to promote development of the agriculture sector, acting as a complementary lender: you have to seek financing from a private lender first, and the department may then fill the gap between what the project needs and what you were approved for privately. It funds buying an existing farm, starting a new farm, buying shares in a farming operation, buying or developing farmland, and working capital, but not refinancing or repaying debt. Applicants provide a business plan with three years of projections and three years of history, and acceptable security, plus at least 10% equity into the project. New entrants, defined as someone who has owned a farm for five years or less, may be eligible for lower interest rates and a 5% equity requirement. There is no application fee, interest rates are set case by case, and loan guarantees carry a fee of 1.5% of the amount guaranteed each year.

Eligibility Requirements

• For the development of the agriculture sector: every eligible activity listed is a farming activity
• Clients interested in a DAAF loan or loan guarantee must first seek financing from a private lender; the department's programme may then be available to help fill the gap between the assistance required and what the client has been approved for privately
• Eligible activities: purchase an existing farm; start a new farm; purchase shares in a farming operation; purchase land for farming; develop land for farming; working capital requirements
• Refinancing or repaying debt is not an eligible activity for a loan or loan guarantee
• Applications must include a business plan with a description of the business and project, a management plan and management's qualifications including education and work experience, a marketing plan, and production details
• Financial information: a minimum of three years of projected income statements and cash flow statements, plus the previous three years of financial statements or income tax returns for an existing operation
• Production details: a three-year historical summary of actuals and a three-year summary of projected production, including assumptions
• Acceptable security must be provided for the loan or loan guarantee
• The applicant must demonstrate a minimum 10% equity into the project, or 5% for new entrants; the department may require a higher equity level based on the risk of the project
• New entrants, defined as someone who has owned a farm for five years or less, may be eligible for lower interest rates and equity requirements