Young Farmer Loan

The Young Farmer Loan is a loan product available for producers under the age of 40.  Its primary purpose is to purchase ag-related assets to help expand or improve your operation.

There are some really great features attached to this product, such as no loan processing fees and a 25 per cent discount on any FCC AgExpert product.  As well, you can add other loan features to meet your specific needs, such as deferred payments or interest-only payments.  The maximum lifetime amount available per person is $500,000.

Account setup

1.  To set up your Young Farmer Loan in AgExpert Analyst, start by going to Setup > Chart of Accounts.
2.  Go to the Liability tab and scroll down until you find your loans. 
3. Select the account Machinery Loans, and click Add.
4. Set up a new sub-account for your loan.  Once the account is set up and named, click Save.
5. The account will take the next sub-account number available.
6. Click Close.

Loan balance setup

Now we can go to the Transaction Entry screen.  In order to enter the balance of the loan received, we have to enter a transaction that also tells us what we bought with that money. 

1. Set up a “zero-dollar” withdrawal.  Set this up by entering your date, reference and description.  Leave the total as $0.00.
2. Now we can enter what we purchased.  This is typically done as a C+ (capital asset purchase) for equipment or an A+ (asset purchase) for land.
3. Once the first line is completed, you will be out of balance.  Create a second line.  This second line will set the balance of your received loan proceeds.  Make this line an L+ (loan addition) and select the loan you just set up.
4. AgExpert Analyst will automatically attempt to balance the transaction for you.  However, there may be other, smaller fees you need to account for.  Make sure the amount of the loan is correct, and if necessary, add another line.  The third line is to expense any documentation, admin fees or service charges.
5. Ideally, at this point, the transaction should be balanced and you can click Record.

Payment on your loan

Generally, payments to your Young Farmer Loan will be a blended principal/interest payment.  It is important to be able to break the payment down into its components.  This serves two purposes – you are able to track you outstanding loan balance as payments are made and claim the appropriate expenses for tax purposes.

You can use FCC Online Services to get this breakdown.  You can access this by going to FCC.ca and clicking Online Services at the top of the screen.

1.  Enter your user name and password to access your loan information.
2. You will now be on your My FCC page.  On the right, click on My Loans.
3. Once you find the loan you are paying, click the Transactions tab.
4. You can filter the dates on your transactions tab to determine the principal and interest breakdown of your individual payments.  Simply change your dates or select your month, and click Search.
5. Moving back over to AgExpert Analyst, use this information to make your entry.  Enter a withdrawal from your bank account for the amount of your loan payment.
   • On the first line, use type L- (loan payment).  Select your Young Farmer Loan from your list.  Go to Amount and enter the amount of principal being paid.  Move to the next line.
   • The second line is an expense and should be coded to Loan Interest Expense.  Again, tab over to Amount and enter the correct amount of interest. 
   • Finally, add a third line, if needed.  You can also expense any life insurance paid.  This is an expense and should go against Loan Life Insurance.  If you don’t have this account, add it.
6. This should balance your transaction. Click Record.

Year end verification

Finally, at the end of your fiscal year, you will want to verify that you have the correct balance on your loan.  This ensures you are tracking it correctly and that you are claiming the correct amount of expense.  Again, FCC Online Services can help you accomplish this. 

1. Log into Online Services, and click on My Loans.  Select your Young Farmer Loan.
2. Click View Loan Balances.
3. In the Balances screen, change your “as of” date to your fiscal year end date.  Click View.
4. The principal balance will be shown on this screen.  This should match what you have entered in AgExpert Analyst.
5. In AgExpert Analyst, go to Reports > Reports Console. In the Financial Section, select the Loan report.
6. You can do a summary report to show your loan balance or a detail report if you need to verify your transactions for the year.  The balance on this report should match the balance from Online Services.

Last updated on August 26, 2019 by FCC AgExpert