Others
Q. Can a FIMCLA be transferred?
A. No. A loan guarantee is provided based on eligibility of the borrower and the intended purpose, to a particular lender on a
specific date. This guarantee cannot be transferred by one lender to another lender. The
initial borrower must pay out the loan and then initiate a new loan with another second
lender. In these cases the second lender applies for FIMCLA guarantee, and the loan registration requires payment of the prescribed registration fee.
Q. When a loan is 'transferred' between lenders (not branches), does the FIMCLA guarantee transfer?
A. No Every lender must submit a new Schedule 1 and fee. A new loan guarantee is required and the purpose would
be considered, consolidation/refinancing. The lender must be prepared to provide all supporting documentation on the
new loan and on the original loan in order to support the eligible guarantee and possible claim for loss.
Compliance Required (Section 12(1) of the Act)
The Minister is not liable under this Act to make any payment to a lender in respect of any loss sustained by it as a result
of a loan unless:
- the lender has complied with regulations made pursuant to this Act; and
- the lender has, a such time as is prescribed, paid to the Minister a fee of 0.85 percent of the amount of the
loan or such other fee as is prescribed or calculated in the manner prescribed.
Q. Can the fee be financed under FIMCLA?
A. Yes. The FIMCLA registration fee and the Lenders administration fee are eligible purposes under the Act.
Q. Can an eligible FIMCLA be registered in the Minister's registry if 60 days has elapsed?
A. Yes. If the Schedule I and Fee Submission is not received within this time frame, the Minister may, on application
by the lender extend this time limit. In the case of construction loans, the lender has 180 days to register this loan.
Q. If a loan is financed under FIMCLA but it is later determined that the loan did not qualify can the lender request a
refund of the user fee?
A. Yes. The lender must scrutinise and ensure that the loan qualifies under the program prior to submitting the Schedule
1 and Fee Submission.
Q. What is the maximum fee a lender can charge a borrower?
A. The lender may charge a fee to the borrower for the administration of a loan:
- the lesser of 1/4 of 1 % of the principal and $250.00 where the loan is less than $250,000;
- 1/10 of 1% on the entire loan where the loan is $250,000. or more.
Q. What is the minimum requirement for a 'Revision of Loan Terms'?
A. The minimum requirements are:
- Principal payments are not in arrears;
- Interest arrears must be brought current;
- Loan must be fully secured;
- Producer will be able to meet new terms.
Q. Can the GST be financed under FIMCLA?
A. No. GST cannot be included in the purchase price of the item being financed under FIMCLA because all agricultural
items are zero-rated. A farmer is entitled to a refund from the government for the total amount.
Q. Can an eligible farmer obtain a FIMCLA and a Small Business Loan?
A. The same individual may qualify for two different purposes or projects. There is a general distinction between the
two programs. Small Business does not guarantee farm loans.
Lenders should request rulings from the FIMCLA Administration, where they consider it is not clearly covered by the
Act or Regulations and/or requires interpretation.
When granting a loan under FIMCLA, it is important to that a lender exercise the same care and prudence in granting a
loan as it does in granting its own agriculture loans, in its ordinary course of business.
For additional information you may contact a local financial institution or:
The Farm Improvement & Marketing Cooperative Loans Administration (FIMCLA)
Agriculture & Agri-Food Canada
2200 Walkley Road,
Ottawa, Ontario
K1A-OC5
Phone: 613-759-6295
Fax: 613-759-6315
Toll Free: 1-888-FIM-CL11 (Producer's Toll Free Line)
