Conexus Credit Union has launched a new $100 million agriculture growth fund that aims to limit barriers faced by farmers.
Agriculture is a major focus for Conexus, considering the industry makes up a “substantial component” of its overall book.
It’s one of the reasons why the credit union launched the Ag Grow Fund at Canadian Western Agribition in Regina.
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“The vast majority of our branches actually sit in rural areas,” said Todd Andries, vice-president of business banking for Conexus.
“And so, we’re really proud of the support we provide agriculture and producers. A lot of what we do is focused on that primary production or support industries and things like that.”
As a Saskatchewan credit union, Conexus is focused on supporting one of the province’s biggest industries.
“It (agriculture) is something that we’re proud to support and want to continue to support, which is a big reason for this fund,” said Andries.
The fund supplements other products in the credit union’s ag portfolio, providing a way for it to waive fees and reduce interest for agriculture producers opening new loans or mortgages. It does not apply to existing, currently open loans or refinanced loans.
Waived fees and discounted interest, as well as flexible repayment, can be applied to loans and mortgages for purchases of land, equipment and livestock, establishment of new buildings, and operation expansions. The goal is to provide farmers with a means to do what they need to do to stay operational without the challenges of extra fees and high interest.
“Especially coming through the last, like, even 15-year period, interest rates are still higher than everybody’s used to,” Andries said.
“So, by eliminating the fees on it and reducing the interest rate, we’re really excited to be able to help the producers in an environment where costs are rising across the board.”
Conexus allocated $100 million to the fund, which allows it to reduce costs for producers in interest and fees. The only exception is the Canadian Agriculture Loans Act (CALA) fees, which are divided into a financial institution fee and a government fee. The Ag Grow Fund can be used to waive the Conexus portion of the fee, but not the government portion because it’s mandatory.
A producer can qualify for waived fees on up to $2 million worth of loans.
The offer differs from other available products across financial institutions because there’s no age or experience limitations — all that’s required is to be in agriculture.
“Other products are maybe for the like, beginner farmers or young farmers, defined as a certain age and under — whatever that might look like. This supports all facets of ag production.”
Flexible repayment options are another benefit. Andries said farmers don’t get paid as regularly as those with a 9-to-5 job, and the credit union wants to accommodate that.
“As far as repayment, what we like to pride ourselves on is the ability to kind of match your repayment to your cash flow in your operation.”
Flexible repayment is up to the loan holder. Frequency can be as often as weekly, or as spread out as semi-annual or annual. Andries said there is an opportunity to adjust the repayment structure to producer needs, even offering a pause period if necessary to match cash flow.
