Funding Your Farm: Digging up Dollars
Financing your farm (ad)venture can be a challenging puzzle to figure out. We all need some amount of money to start up and operate a farm and this money can come from a variety of sources. As Lydia (one of our speakers) says, “I know that [lending] is not a very glamorous topic but can be very empowering as I have found that sorting out finances/cash flow and understanding finances can be a major stress reducer.” In this topic we’ll be talking about what you need to consider and prepare when accessing funding from sources such as loans from traditional banking institutions and community members, grants, fundraisers, and alternatives to monetary exchange (e.g. work trades).
For the lending session we are joined by two presenters:
Lydia Carpenter farms cattle, hogs and hens with her husband and young child in southwest Manitoba. As first generation on the farm she and her husband built their farm business up from land leases and custom grazing operations. They started farming together in 2011 with nominal savings and the opportunity to lease 80 acres of pasture. By 2014 they were both employed full time on the farm with much of their income coming from direct market sales of cut and wrapped meats. They currently run a profitable farm business on purchased land with a focus on grazing management and direct meat sales. Lydia has an interest in farm business management, farm policy, farm transition planning, cash flow and financial planning and alternative lending options. Along with her farming she is currently working with a team of farm transition coaches to help farmers on farm mediation and transition planning.
Michelle Rigney grew up on a grain and cattle farm near Lamont Alberta. She completed a B.Sc Agriculture degree at University of Alberta in Edmonton. After graduation she got a job as an Ag Lender with TD Bank & has been involved in Farm & Business Lending ever since (over 20 years). She lives on a beef cattle farm near Westlock with her husband & 4 teenagers. She has worked for Agriculture Financial Services Corporation (AFSC) for seven years and transitioned from a Lender to a Lending Coach last spring. She is enjoying the new challenge & especially “helping more lenders to help more farmers”.
You will also find a video about grants from Andrew Rosychuk of Rosy Farms, Alberta’s first haskap farm. Andrew is a city slicker turned regenerative farmer and an expert when it comes to applying for farm grants. Andrew will be joining us for the Operations Plan & Logistics session, so you will have a chance to ask him all your grant-related questions then!
VIDEOS
Overview of Funding Your Farm (Alex Pulwicki)
Farmer Story – Lydia Carpenter (Luna Field Farm)
Lender’s Perspective – Michelle Rigney (AFSC)
Grants – Andrew Rosychuck (Rosy Farms)
WORKSHEET
Before going to a lender, you’re going to need to get an understanding of your assets, liabilities, and equity by filling out a Balance Sheet (or Net Worth Statement). Here is the Balance Sheet Template from Chris Bodnar provided in the Financial Planning session. This is a good place to start as an overview of your current situation.
Balance Sheet Template
It’s also important to think about the 5 Cs of credit: capacity, capital, collateral, conditions and character. This next worksheet focuses on character, which is one of the least tangible but most important Cs! There is also an exercise that will help you anticipate your funding needs and brainstorm different funding options.
Lending Worksheet (doc)
Lending Worksheet (pdf)
RESOURCES
Website – Line of Credit & Loan Payment Calculator (RBC)
Website – Business Benefits Finder (Government of Canada)
Funding Programs
Website – How to Apply for Farm Grants In Canada (Young Agrarians)
Website – Wage Subsidies for Farms in Canada (Young Agrarians)
Website – Federal Agriculture Funding Programs (Government of Canada)
Website – Rock My Business Start Up Awards (RBC & Futurpreneur)
Website – Financing For Young Entrepreneurs (Futurpreneur)
Website – Alberta Farm Loan Programs (AFSC)
Website – BC Small Growers Fund (Vancity)
Website – Young Farmers Loan (Farm Credit Canada)
Many banks, such as CIBC, RBC, & Scotiabank, offer loans and mortgages specifically for farm businesses, so be sure to talk to your bank about your options as a farmer!