$100M fund launched to help agri-food companies
By Food in CanadaFood In Canada Business Operations Packaging Fruit & Vegetables COVID-19 Farm Credit Canada
May 15, 2020, Ottawa, Ont. – The federal government has launched a $100-million Agricultue and Food Business Solutions Fund to support proven, viable companies through unexpected business disruptions, such as the COVID-19 pandemic.
The announcement was made by Agriculture and Agri-Food Minister Marie-Claude Bibeau on behalf of Farm Credit Canada (FCC).
Launched in partnership with Forage Capital Inc. – a Calgary-based venture capital firm – the Fund is set up to provide companies with the financial stability and flexibility to rebuild their business models during challenging times. FCC is the sole investor in the fund.
The fund is set up to support a wide range of enterprises in the agri-business and agri-food sector, including companies involved in primary production, agri-tech, manufacturing, packaging and distribution. The fund will help companies in times of need through innovative solutions such as convertible debt investments and other flexible financing solutions. Applications will be assessed individually on their merit, and will be supported to a maximum of $10 million.
The primary goal of the Fund is to return recipient companies to a sound financial footing. To qualify, companies need to demonstrate an impact from an unexpected business disruption, such as the loss of a key supplier, temporary loss of a facility or permanent loss of critical staff or leadership. Funds can not be used to repay shareholder loans or purchase shareholder equity positions.
“This type of investment fund will offer companies another option when faced with business disruptions,” said Bibeau. “Through the application of flexible and innovative solutions, the investments will preserve jobs and strengthen food security for all Canadians.”
Farm Credit Canada is the country’s leading agriculture and food lender, with a loan portfolio of more than $38 billion.
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