Canadian Canola Growers Association

Growing Flexibility with a Cash Advance

June 22, 2021Hub Article

​​​​​​​​​​​​More and more, farmers are taking a second look at their cash advance as a way to: 1) balance the highs and lows of seasonal cash flow, 2) reduce operating borrowing costs, and 3) realize grain​ marketing objectives by better timing commodity sales.

A cash advance from CCGA is an excellent financing tool to provide cash flow during the busy growing season and is repaid when you sell your commodities later in the program year.

Many farmers take advantage of the Advance Payments Program (APP) every year to reduce the borrowing costs of their short‑term financing needs. Offering $100,000 interest‑free, and up to an additional $900,000 at CIBC prime rate less 0.75%, the blended interest rate on a 2021 cash advance is always below prime. Farmers can realize significant savings in interest costs from their cash advance, which can range from $3,500 in savings for a smaller interest-free advance, up to nearly $20,000 in savings at the maximum advance limit.

An APP cash advance from CCGA also offers many other benefits, specifically designed for farm businesses:

  • Flexibility — No limits or requirements on how advance funds can be used, which may include buying inputs, covering maintenance and repairs, or paying seasonal labour.
  • Minimal collateral — The only security required for a cash advance is the commodity itself and either crop insurance or AgriStability for unharvested crops or livestock
  • Repay‑as‑you‑sell — Your repayments begin only when you start to sell the commodity, within the program year.

A cash advance from CCGA is a farmer‑friendly financing tool that's become an integral part of many farms' annual financing plans. Available on more than 50 commodities, an advance has no administration fee and offers repayment periods of up to 18 or 24 months, depending on the commodity. Now might be the right time for you to consider how your farm could grow with the flexibility offered by a cash advance.

If you have questions about whether an advance is right for you, knowledgeable CCGA staff are just a phone call or email​ away and always ready to help. Read more: Applying for a cash advance

The Advance Payments Program is a federal loan program administered by CCGA. It offers Canadian farmers marketing flexibility through interest‑free and low‑interest cash advances. ​