{"id":9766,"date":"2025-02-06T23:40:28","date_gmt":"2025-02-06T23:40:28","guid":{"rendered":"https:\/\/finderica.com\/?p=9766"},"modified":"2025-02-06T23:40:28","modified_gmt":"2025-02-06T23:40:28","slug":"farm-lending-canada-partners-with-bmo-to-tap-into-agricultural-financing-boom","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=9766","title":{"rendered":"Farm Lending Canada partners with BMO to tap into agricultural financing boom"},"content":{"rendered":"
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In 2019, Family Lending Canada, which was established in 2001, pivoted to the agricultural channel under a new brand, with underwriting provided by EQ Bank and another unnamed major financial institution.<\/p>\n

Now, Farm Lending Canada is bringing on a new powerhouse partner, BMO, with CEO Robb Nelson hinting that a fourth partner could be announced in the coming weeks.<\/p>\n

\n
\"Robb
Robb Nelson, CEO of Farm Lending Canada<\/strong><\/em><\/figcaption><\/figure>\n<\/div>\n

\u201cThey love the asset class\u2014all banks do\u2014and they saw how we operate,\u201d he said in an interview with Canadian Mortgage Trends<\/em>. \u201cWhen we approached them to be a lending partner with us, they were very complimentary of how we run our business and the asset class, and joined in.\u201d<\/p>\n

Nelson says banks typically want a five-year track record before underwriting lending products like Farm Lending Canada\u2019s AgriRoots Diversified Lending Fund LP. As the company celebrates the product\u2019s fifth anniversary, financial institutions are eager to get involved.<\/p>\n

\u201cThe bottom line is, it gives us a lower cost of capital that we can pass on to the consumer, and it gives us a lot more capital,\u201d Nelson says. \u201cThe market is in the multi-billions, and we need access to lower-cost capital and more capital, so that\u2019s what the partnership does.\u201d<\/p>\n

The announcement follows a recent $60-million commitment by Farm Credit Canada to Glengarry Farm Financial Corporation to help farmers weather temporary financial challenges.<\/p>\n

Why brokers should get into farm financing<\/h2>\n

Many of the same factors that make the asset class a darling on Bay Street make the agricultural alternative lending space an appealing opportunity to brokers, especially those with ties to the country\u2019s farming communities, Nelson explains.<\/p>\n

\u201cIt\u2019s inflationary resilient, it\u2019s always growing\u2014the asset class hasn\u2019t had a downturn in value since 1986\u2014and it\u2019s non-correlated to either the commercial or residential sector,\u201d he says. \u201cIt\u2019s an asset class that you should look at because it doesn\u2019t have ebbs and flows like the commercial and residential markets.\u201d<\/p>\n

Nelson concedes that not all brokers are well-suited for the agricultural lending space, but suggests those who live in or near rural communities\u2014or grew up in one\u2014should give it a closer look.\u00a0 \u00a0<\/p>\n

\u201cThey already know all about the borrowing habits of farmers, but they\u2019ve never had a product to position for them; this is the first,\u201d he says. \u201cIt allows all the rural mortgage brokers and agents across the country to have a product offering and to get paid on it, because we pay a broker commission; that was never available before.\u201d<\/p>\n

Nelson says the AgriRoots fund primarily provides short-term bridge financing, averaging 18 months, to help borrowers transition back to mainstream lending.<\/p>\n

\u201cWe only underwrite the exit\u2014we\u2019re not an equity lender, we\u2019re all about transitional,\u201d he says. \u201cThe broker community is therefore helping the farmer twice; they\u2019re taking them from a situation where they need alternative credit back to prime within that 18-month period.\u201d<\/p>\n

A budding sector with room to grow<\/h2>\n

When Nelson began his broker career 25 years ago, he says agricultural-specific products were few and far between, especially among brokers.<\/p>\n

As the broker channel grew, the industry expanded from the big cities into the small towns and rural communities and became more attuned to their unique needs. At the same time, regulatory changes made it harder for lenders to offer products tailored to those borrowers.<\/p>\n

\u201cWe\u2019re supporting an area where some other provincial and federal lenders had the flexibility before, but with regulatory changes, they may not have that same flexibility,\u201d he says. \u201cThat left about 20% of farmers annually looking for alternative financing. That\u2019s where we come in.\u201d<\/p>\n

Now, the niche lending sector is expected to balloon as one generation passes down their farms to the next.<\/p>\n

\u201cWe\u2019ll see about 20% of farmers retiring in the next eight years, so there\u2019s about $200 billion of assets that need to change hands, and financing options will be required for part of that $200 billion, in an industry that only has $190 billion in debt today,\u201d he says. \u201cWe\u2019re looking at somewhere around a 50% to 70% increase of borrowing capacity needed in the next eight years.\u201d<\/p>\n

Visited 381 times, 381 visit(s) today<\/p>\n

agricultural lending bmo Farm Credit Canada farm financing Farm Lending Canada Glengarry Farm Finance Robb Nelson<\/p>\n

Last modified: February 6, 2025<\/p>\n<\/p><\/div>\n

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In 2019, Family Lending Canada, which was established in 2001, pivoted to the agricultural channel under a new brand, with underwriting provided by EQ Bank and another unnamed major financial institution. Now, Farm Lending Canada is bringing on a new powerhouse partner, BMO, with CEO Robb Nelson hinting that a fourth partner could be announced<\/p>\n","protected":false},"author":1,"featured_media":7568,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[216],"tags":[3846,3845,3847,726,2537,2380,1051,1185,1290],"class_list":{"0":"post-9766","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-mortgage","8":"tag-agricultural","9":"tag-bmo","10":"tag-boom","11":"tag-canada","12":"tag-farm","13":"tag-financing","14":"tag-lending","15":"tag-partners","16":"tag-tap"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/9766","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9766"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/9766\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/7568"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9766"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9766"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9766"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}