F-1.2 - Act respecting farm financing

Section 13 Disposition versions

1988-08-11

13. To be eligible for a loan the applicant must

(1)  prove to the Office that he is a farmer, an aspiring farmer or a group operation or will become so upon obtaining the loan applied for;

(2)  meet the criteria of need for the loan prescribed by regulation;

(3)  prove to the satisfaction of the Office

(a)  that he is the owner or lessee of a farming business that is an economic farming business or can become so through the loan applied for, or will become the owner or lessee of such a business upon obtaining the loan applied for or, in the case of an aspiring farmer, that the business contemplated may become economic within the time provided for in his operating plan;

(b)  that the business referred to in paragraph a will have sufficient financial autonomy, considering the financing that may be granted to him following the application, the nature of the production in which he is engaged, his obligations and the related terms of repayment;

(c)  that he has the capacity to repay the loan applied for;

(4)  where he holds under an emphyteutic lease or occupies under an ordinary lease the farm or part of the farm in respect of which the loan is applied for, prove that the lease complies with the standards prescribed by regulation.

The occupant of a farm under a location ticket is considered to be a lessee for the purposes of this section and the location ticket is deemed to comply with the standards prescribed for an ordinary lease.

Except in the case of a farming business existing before 11 August 1988 and in the other cases prescribed by regulation, the business contemplated in subparagraph 3 of the first paragraph must be situated in an agricultural zone established in accordance with Division IV of the Act to preserve agricultural land (chapter P-41.1) or in a reserved area within the meaning of the said Act.

Where the business referred to in subparagraph 3 is not entirely situated in Québec, the part situated in Québec shall be sufficiently large, in the opinion of the Office, to be considered a farming business that is or may become an economic farming business through the financing applied for.

For the purposes of this section, a farming business which, taking into account all of its resources, is capable of producing income which enables the operator to cover the operating costs, including interest on loans and depreciation, and to support himself and to meet any other obligations is considered an economic farming business. A farming business shall not cease to be considered economic by the sole fact that it must call upon the resources of another farming business, provided that it has the minimum resources deemed adequate by the Office and that it meets the conditions prescribed by regulation.

1987, c. 86, s. 13.