Quick Application for New Debt Consolidation Loans

CANADA - Farm Credit Canada is advising pork producers planning to apply for loans under a just launched federal pork industry restructuring plan to do so quickly, writes Bruce Cochrane.
calendar icon 7 October 2009
clock icon 3 minute read

Last week Agriculture and Agri-Food Canada announced final details of a loan program that will allow pork producers to consolidate existing debt and repay the money over a period of up 15 years.

Farm Credit Canada senior vice president portfolio and credit risk Remi Lemoine says the loans will be based on 2008 production with producers eligible to apply for up to 85 dollars per market hog, 35 dollars per weaner pig and 25 dollars per isowean shipped in 2008.

Remi Lemoine-Farm Credit Canada

Part of the program is a program that's been termed a loan loss reserve program and the nature of that program is to help give producers more working capital room.

As you know the industry has been in quite a slump for a number of years and it's put a lot of pressure on their cash flow, their budgets and their equity so the nature of the program as announced is to provide the banks and credit unions and FCC a loan loss reserve where they can help producers take those shorter term debts and operating loans that have accumulated and spread them over a longer term.

Primarily the guidelines around that are that the producer should be able to show some viability in the long run.

So they would have to provide a business plan, cash flow that shows that they are going to still have available credit for 12 months and that there is reasonable expectation that they are solvent and will continue to be for a period of time to see them through to when the cycle comes out again, hopefully by next spring.

Mr Lemoine notes loan applications must be approved by the end of February, 2010 and the money must be dispersed by the end of March so producers should be in contact quickly with their financial advisors, accountants and lenders.

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