Farm Finance

Farming is a business, not a hobby – so you’ll need a detailed plan for funding and maintaining your operation. Take time to think about the financing you’ll need for your South Fraser farm, and create a solid financial plan with help from a professional. You’ll need to familiarize yourself with the crops you’re interested in farming to understand what resources you’ll need. Before you know it, you’ll be free to focus on the part we all love best: getting out on the land.

Financing a Small Farm

The amount and type of financing you’ll need for your Fraser Valley farm will depend on the size of the operation and your own financial situation. There are four main sources to consider:

  • Personal resources: You may be able to fund a small farm with personal or family savings, or lines of credit.
  • Business/farm loans and lines of credit: For larger farms, especially those needing machinery and buildings, you may require a loan or credit from a financial institution. Financial Institutions, like Vancity offer a variety of loans that could help finance your farming operation.
  • Operating credit: Some suppliers provide short-term credit over the growing period. Co-operatives, for instance, sometimes offer supplies to members in exchange for future earnings from farm production.
  • Farm grants: Some Fraser Valley farmers may be eligible for grants to help with start-up, hiring, training, marketing, and other aspects of the business. Visit Smart Farm BC and the Community Farms Program website for more details on small-farm grants and loans.

Financial Plan

Here, you’ll need to go beyond subtracting production costs from projected sales. A farm financial plan should include:

  • Projected income statement: How much you think you can make. When forecasting, be conservative. Don’t assume your profits will come close to those of an established farm. Create projections for best-case and worst-case scenarios.
  • Cash flow analysis: How much cash comes in and goes out of the business over a set period?
  • Projected balance sheet: Any spending or income that isn’t profit or loss. This includes assets, liabilities, and capital.
  • Source-and-use-of-funds analysis: A yearly summary of where your capital will come from, and what it will buy for the business.

If this sounds a bit too complex to handle on your own, here are some resources that can help you. We strongly recommend hiring an accountant to look at your projections – and all of your books going forward.

Learn more about small-farm financial planning on the BC government Farm Business Management website, and Farm Management Canada.

For tax planning and budgeting tips, visit Canada Revenue‘s website for farmers.

For more information on funding opportunities for farmers, you may want to look at the Community Farms Program page on Grants and Loans for Farmers.


What’s next? Recruit farm workers and human resources.