Taking advantage of the Advance Payments Program (APP) can be extremely beneficial to you and your farm. With $100,000 interest-free and up to $400,000 at a blended interest rate below prime, farmers can use a cash advance to lower their cost of production and take more time to execute their grain marketing plan.
Of course, part of signing up for a cash advance is agreeing to meet deadlines throughout the program year. In a busy farm environment, this can be a challenge. However, it’s crucial for you to submit paperwork and repayments when deadlines call for it, and in this post we’ll explore:
- What a missed deadline means for your cash advance;
- Why these deadlines exist, and;
- Tips to keep your account in good standing.
What a missed deadline means for your cash advance
Whether it’s missing paperwork or repayments, a missed deadline can put your cash advance account into default. This has implications: you’ll lose the interest-free benefit, you’ll be charged default interest and penalties, and you’ll be ineligible to apply for a cash advance.
For these reasons, it’s important to take deadlines seriously.
Why these deadlines exist
Repayment and paperwork deadlines are part of legislation that governs the Advance Payments Program, the Agricultural Marketing Programs Act. These deadlines happen within the production and marketing cycles of most farms, and are meant to verify the progress of your commodity and whether you’ll be able to support and maintain security for your cash advance.
For grain farmers who have an Intended Seeding Advance or an Actual Seeded Advance, summer means submitting your Actual Seeded Advance Report and the Seeded Acreage Report from your crop insurance agency. This is needed for identification of crop insurance, should you have a crop failure before harvest.
Then, for producers of all commodities, there’s the Post-Harvest/Fall Advance Report. This is needed to verify that there’s enough grain in the bin, or enough livestock available, to secure the advance.
When submitting this required paperwork, farmers also have the opportunity to apply for more funds; assuming they have additional commodity not already in their advance and they’re not at the $400,000 limit.
Finally, legislation requires that farmers make repayments as they sell the commodities on their advance; 30 days from receipt of payment or 60 days from delivery. Sending in Proof of Sale helps ensure that is happening. There are a couple of Proof of Sale exceptions for grain advances, though:
- When an authorized grain company takes a deduction and remits it to CCGA on your behalf, they already provide Proof of Sale documentation , and;
- When a grain repayment is made before January 31 of the given program year, no Proof of Sale is required.
Tips to keep your account in good standing
When sending in paperwork, there are conveniences you can take advantage of. If you’re already reporting your harvest numbers to crop insurance, it might make sense to send the Post-Harvest/Fall Advance Report to CCGA at the same time. Much of the information will be inputted the same on each report.
When repaying, most people submit their Proof of Sale shortly after making a repayment – either by email, fax, or lettermail. This makes sense, because then it’s taken care of and you don’t need to hunt for it later.
It also helps to learn about deadlines well before they happen. There are a few ways to receive communication from CCGA in the method that’s most convenient for you. First off, our cash advance team sends out notifications in your monthly statement by mail, to ensure you’re updated with the latest information.
If you’re more inclined to the digital world, make sure you’re signed up for our CCGA Cash Advance News email newsletter, which will notify you of deadlines and provide other important news relating to your cash advance. You can also find a list of dates and deadlines on our website here or on the CCGA Cash Advance App, available on the App Store and Google Play. We also periodically send out deadline reminders on our Twitter account, @ccga_ca.
Meeting deadlines is an important responsibility when you have a cash advance. With these tips, though, balancing your advance with running your farm will be that much easier.
Have questions about a deadline? Get in touch with us and talk to a member of our cash advance team, either by phone at 1-866-745-2256, or by email at ccga@ccga.ca.