La Financière agricole du Québec

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Farm business transfers: The tax credit of the Seller-Lender Formula is extended by five years

La Financière agricole du Québec is happy to announce that the tax credit for the Seller-Lender Formula will be extended until January 1, 2025 in order to continue to meet needs related to successors and businesses transfers in the agriculture sector.

The Seller-Lender Formula is designed to facilitate farm transfers between buyers and sellers, related or otherwise. It also enables the seller to finance the successor, in whole or in part. To this day, 485 businesses have benefited from the formula, for a total of more than $158M of authorized capital.

Thanks to the tax credit, the borrower benefits from a rebate of 40% of interest paid. The tax credit applies to interest covering a 10-year period, beginning on the day the financing agreement is concluded.

For the lender, the Seller-Lender Formula means an investment that is 100% guaranteed by La Financière agricole. In case of financial difficulties by the purchasing business, La Financière agricole can take over to make payments to the seller for a maximum period of 12 months. In short, this formula has many advantages, for both the buyer and the transferor!

A thumbnail sketch of how it works

The seller immediately collects part of the sale amount, with a balance due over time. This balance is reimbursed according to the terms and conditions of payment negotiated with the buyer. Throughout the duration of the loan guarantee granted as part of this formula, La Financière agricole supports the seller as well as the buyer with no administrative monitoring charges applied.

Examples of support services offered by La Financière agricole du Québec:

  • Financial analysis of the project
  • Discussion of the business’s commercial environment
  • Consultation in developing a business plan
  • Help in interpreting financial statements
  • Discussion on financing choices
  • Support in preparing a business financial turnaround plan, if needed
  • Amortization schedule provided
  • Information on current market mortgage interest rates
  • The possibility of payments being covered by La Financière agricole in the event of default

If the Seller-Lender Formula seems to be for you, don't hesitate to visit our dedicated section on the website or to discuss with an adviser at one of our service centres.

La Financière agricole is the reference in terms of financing in its sector of activity. Our organization is proud to contribute to the sustainability of farm and agri-food businesses.