Farm Credit Canada-backed fund of­fers in­no­va­tive so­lu­tions for un­cer­tain times

Prairie Post (East Edition) - - NEWS - Con­trib­uted

Marie-Claude Bibeau, Min­is­ter of Agri­cul­ture and Agri-Food, on be­half of Farm Credit Canada (FCC), an­nounced on May 14 the launch of a $100-mil­lion Agri­cul­ture and Food Business So­lu­tions Fund to sup­port proven, vi­able com­pa­nies through un­ex­pected business dis­rup­tions, such as the COVID-19 pan­demic.

Launched in part­ner­ship with For­age Cap­i­tal Inc. – a Cal­gary-based ven­ture cap­i­tal firm – the Agri­cul­ture and Food Business So­lu­tions Fund is set up to pro­vide com­pa­nies with the fi­nan­cial sta­bil­ity and flex­i­bil­ity they need to re­build their business mod­els dur­ing chal­leng­ing times. FCC is the sole in­vestor in the fund.

The fund is set up to sup­port a wide range of en­ter­prises in the agribusi­ness and agri-food sec­tor, in­clud­ing com­pa­nies in­volved in pri­mary pro­duc­tion, agri-tech, man­u­fac­tur­ing, pack­ag­ing and dis­tri­bu­tion. The fund will help com­pa­nies in times of need through in­no­va­tive so­lu­tions such as con­vert­ible debt in­vest­ments and other flex­i­ble fi­nanc­ing so­lu­tions.

Ap­pli­ca­tions will be as­sessed on merit, and will be sup­ported to a max­i­mum of $10 mil­lion. The pri­mary goal of the Agri­cul­ture and Food Business So­lu­tions Fund is to re­turn re­cip­i­ent com­pa­nies to a sound fi­nan­cial foot­ing. To qual­ify, com­pa­nies need to demon­strate an im­pact from an un­ex­pected business dis­rup­tion, such as the loss of a key sup­plier, tem­po­rary loss of a fa­cil­ity or per­ma­nent loss of crit­i­cal staff or lead­er­ship. Funds can­not be used to re­pay share­holder loans or pur­chase share­holder equity po­si­tions.

The May 14 an­nounce­ment com­ple­ments the an­nounce­ment on March 23, to en­hance FCC’s lend­ing ca­pac­ity by an ad­di­tional $5 bil­lion to help pro­duc­ers and agri-food busi­nesses with ac­cess to cash flow to get through the COVID-19 pan­demic. Since then, more than 4,800 pro­duc­ers and agrifood busi­nesses have used pay­ment de­fer­ral op­tions on FCC loans to­talling $4 bil­lion and have es­tab­lished credit lines to­tal­ing more than $500 mil­lion to al­le­vi­ate short-term cash flow con­cerns. Quick Facts

• May 14 is part of a set of ac­tions. These fed­eral ini­tia­tives in­clude:

• Cre­at­ing a $77.5 mil­lion Emer­gency Pro­cess­ing Fund to help food pro­duc­ers ac­cess more per­sonal pro­tec­tive equip­ment (PPE), adapt to health pro­to­cols, au­to­mate or mod­ern­ize their fa­cil­i­ties, pro­cesses, and op­er­a­tions, and re­spond to emerg­ing pres­sures from COVID-19 so they can bet­ter sup­ply Cana­di­ans with food dur­ing this pe­riod;

• Launch­ing na­tional AgriRe­cov­ery ini­tia­tives of up to $125 mil­lion in fund­ing to help pro­duc­ers faced with ad­di­tional costs in­curred by COVID-19;

• Launch­ing a first-ever Sur­plus Food Pur­chase Pro­gram with an ini­tial

$50 mil­lion fund de­signed to help re­dis­tribute un­sold in­ven­to­ries;

• Launch­ing a Business Credit Avail­abil­ity Pro­gram to pro­vide

$65 bil­lion of ad­di­tional sup­port through Business De­vel­op­ment Bank of Canada and Ex­port Dev. Canada;

• Cre­at­ing the Canada Emer­gency Business Ac­count to pro­vide up to $25 bil­lion to el­i­gi­ble fi­nan­cial in­sti­tu­tions so they can pro­vide in­ter­est-free loans of up to $40,000 to small busi­nesses and not-for-prof­its, to help cover their op­er­at­ing costs dur­ing a pe­riod where their rev­enues have been tem­po­rar­ily re­duced;

De­fer­ring in­come tax pay­ment for all Cana­dian busi­nesses, in­clud­ing agribusi­nesses, un­til af­ter Au­gust 31;

• De­fer­ring Goods and Ser­vices Tax/ Har­mo­nized Sales Tax (GST/HST) pay­ments un­til June, as well as cus­toms du­ties owed for im­ports for busi­nesses, in­clud­ing self-em­ployed in­di­vid­u­als;

• Ex­tend­ing loan dead­lines for all farm­ers with out­stand­ing loans un­der the Ad­vance Pay­ments Pro­gram;

• Ex­tend­ing the AgriSta­bil­ity en­roll­ment dead­line from April 30-July 3;

• Canada is in­vest­ing $50 mil­lion to help em­ploy­ers of tem­po­rary for­eign work­ers put in place the mea­sures nec­es­sary to fol­low the manda­tory 14-day iso­la­tion pe­riod re­quired of all work­ers ar­riv­ing from abroad.

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