CIBC Farm Improvement Loan
You can use a Farm Improvement Loan to finance a wide variety capital improvements and/or purchases.(1)
Farm Improvement Loans (FIL) are provided under the federal government's Farm Improvement and Marketing Cooperatives Loans Act (FIMCLA) and can be used to finance a wide variety of approved purchases. For example, you can use an FIL to finance the installation or repairing of farm equipment and machinery; make improvements to farm buildings or structures; purchase additional farmland and related costs; purchase breeding stock, etc.
Farm Improvement Loan Key Benefits:
- enjoy a preferred interest rate, if you qualify under the federal government's Farm Improvement and Marketing Cooperatives Loans Act (FIMCLA).
- choose either a variable or a fixed interest rate.
- take advantage of a maximum interest rate set at the Bank's prime rate (3) plus 1%, with the variable rate option, or
- take advantage of a fixed interest rate option that may be selected from one to five year term. The maximum rate is CIBC's residential mortgage rate plus 1%.
- CIBC Farm Credit Life Insurance (2) also helps provides you and your family with protection from financial hardship if something were to happen to you.
Information you need to know:
Payment Options
The maximum term over which you can repay a FIL is 15 years if the funds are used to purchase additional farmland and 10 years for other purchases or improvements.
Variable Interest Rate Option: You can pay the principal in monthly, quarterly, semi-annual or annual installments, depending on your farm business cycle. Generally, interest rates are considered an operating cost, and are paid monthly.
Fixed Interest Rate Option: Repayment may be arranged on a "principal plus interest" basis or on a blended "principal and interest" basis. Payments can be made monthly, quarterly, semi-annually or annually, depending on your farm business cycle. Unless the payment is "blended", interest costs will generally be paid monthly.
Security
Normally the asset being purchased or improved is used as security for the loan. You may have one or more loans under the FIMCLA program at any one time. However, the combined total owing cannot exceed $250,000.
To apply or get more information about CIBC Farm Loans, contact a CIBC Agriculture Banking Specialist, or visit a CIBC branch.
(1) Subject to credit approval. Some conditions and restrictions apply.
(2) Creditor insurance is subject to limitations and exclusions set out in the insurance certificate provided on enrolment and is underwritten by Desjardins Financial Security Life Assurance Company.
(3) Prime Rate is the variable reference rate of interest per year declared by CIBC from time to time to be its prime rate for Canadian dollar loans made by CIBC in Canada.
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