Five Ways to Put a Cash Advance to Work

Every year, thousands of Canadian farmers meet their post-harvest cash flow needs through an Advance Payments Program cash advance from CCGA. A cash advance provides farmers with access to low-interest financing through their unsold crop and livestock inventory.

Applications still being accepted

Apply by March to take advantage of the current 2024-25 program benefits, including an interest rate of 0.25% below prime and the first $250,000 interest-free. It’s a great way to acquire low-interest financing for several months; repay-as-you-sell terms apply (before September 2025 for field crops, honey, goats, sheep, or lambs and before March 2026 for cattle or bison).

“An advance has the flexibility to be used in whatever way works best for your farm: inputs, livestock feed, repairs and maintenance, wages, and more,” says Dave Gallant, Vice-President, Finance & APP Operations at CCGA.

Five ways farmers put a cash advance to work on their farm

1. Pre-purchase spring inputs for next growing season. Product availability or pricing trends may have you looking to pre-purchase your seed, fertilizer or even fuel. A cash advance provides the cash flow to make those purchases now.
2. Pay for unexpected repairs or necessary improvements. Sometimes harvest comes with unanticipated expenses. A cash advance can finance those expenses or pay for planned improvements you want to tackle now.
3. Get cash flow to pay expenses without selling your crop or livestock inventory. A cash advance gives you time to build and execute your marketing plan while providing cash flow to cover your operating expenses.
4. Generate cash flow from contracted grain that’s not yet sold. Farmers with grain contracted for delivery at a future date can use their contracted inventory to obtain a cash advance as long as the grain remains in their possession. The advance is repaid when the grain is sold.
5. Reduce operating costs through lower interest rate financing. The combined benefits from the interest-free and interest-bearing portions of a cash advance can save farms from $15,000 to $30,000 per year in financing costs, depending on comparative interest rates and the amount of the advance.

Young or new farmers

“Farmers just starting out can also really benefit from cash advances. As long as you own, store and sell your inventory separately from others, an advance can offer savings on interest costs while helping to establish your credit rating,” says Gallant.

CCGA has been serving farmers’ cash advance needs for four decades, offering advances on 50+ commodities including field crops, large and small livestock, organic commodities, and honey.

Cash advance questions? We’re here to help. Call us at 1.866.745.2256 or read more about cash advances.

The Advance Payments Program is a federal loan program administered by Canadian Canola Growers Association. It offers Canadian farmers marketing flexibility through interest-free and low-interest cash advances.