3 Key Benefits of a Cash Advance

Your farm requires cash flow to operate and grow. From maintenance and upgrades to buying fuel, fertilizer, or feed, there are more than a few expenses around the farm. Now that we’re well into growing season, it’s a great time to consider your farm financing options.

An Advance Payments Program cash advance from Canadian Canola Growers Association is a financial tool designed for farmers. It offers fantastic benefits for your operation, including interest rate savings and flexibility in how you use it. More than 10,000 Western Canadian farmers benefit from a cash advance as part of their financial toolkit every year.

A cash advance serves farmers in three key ways, according to Dave Gallant, CCGA’s Vice-President, Finance & APP Operations.

1. A cash advance can save you thousands in financing costs

Using a cash advance, the first $250,000 is interest-free. With a maximum $1 million available at a rate of prime less 0.25% on the remaining $750,000, the interest savings are significant.

For example, a farmer taking a $500,000 cash advance this year would save around $17,000 compared to the same loan at prime rate.

“For many farmers, financing rates may be above prime. Depending on what their cost of financing is, plus how much they borrow, they could save upwards of $30,000,” says Gallant.

2. A cash advance can improve the marketing of your commodity

Cash advances were created as a marketing tool, to provide cash flow with flexibility to use when and how you need on your farm. In growing season, you might use it to pay for spring operating costs. In fall, it can give you extra time to execute your marketing plan.

“As farmers, you only generate cash flow when you sell product,” says Gallant. “An advance puts cash flow in your pocket so that you don’t have to sell your product today.”

CCGA offers advances on more than 50 commodities, including crops, livestock, and honey.

3. A cash advance is great for new/young farmers

With an APP cash advance, the primary collateral required is your inventory. That makes it a powerful tool for young and beginning farmers to get started.

“A lot of farm parents introduce the next generation to the advance program,” says Gallant. “An advance can help these young farmers get started and establish a credit history, which they’ll need as they grow the business.”


The Advance Payments Program is a federal loan program administered by Canadian Canola Growers Association. It offers Canadian farmers marketing flexibility through interest-free and low-interest cash advances.