Cash advance interest rates could soon fall again.
March 27 the Bank of Canada cut its lending rate, which affects what commercial lenders charge, by 0.05 per cent to 0.25.
At press time lenders had not lowered their rates, but were expected to. If CIBC cuts its prime rate to 2.45 per cent from the current 2.95, the Canadian Canola Growers Association will cut the interest on cash advances to 1.7 per cent from the current 2.2 per cent, said association director of finance and operations Dave Gallant.
“That now means that on a $1-million advance, at zero per cent on the first $100,000, 1.7 per cent on the next $900,000, the farmer is effectively paying 1.53 per cent annually for $1 million — a savings of over $9,000 a year if they borrowed the same $1 million from their bank or credit union at prime.