A Farmer's Guide To Agricultural Credit In Alberta

Did you know that you need to manage your credit as carefully as you would manage other production inputs?

 

“Like seeds and chemical, agricultural credit options change and expand with new and innovative products, and can be complicated by legal concerns,” says Rick Dehod, farm financial specialist Alberta Agriculture and Forestry (AF), Edmonton. “Many agribusinesses now extend credit, while traditional lenders are working harder for your business. As a borrower, you are offered more choices and need to develop procedures to evaluate those choices.”

 

To help, AF has a resource, entitled A Farmer’s Guide to Agricultural Credit in Alberta that is designed to assist producers understand credit and to evaluate credit choices and options.

 

“This guide outlines a practical approach to evaluating loans,” says Dehod. “But, before you even start, establish short and long-term financial objectives for your farm operation. Then understand the debt service capacity of your farm business, and your farm’s ability to service that debt. Finally, understand all provisions and obligations and be aware that interest rate is not the only issue.”