Grain Handling Equipment Financing in Canada: Bins, Dryers, Augers and What Lenders Look For
How Canadian grain farmers finance bins, dryers, augers and conveyors through CALA, FCC, banks and brokers.
Grain handling equipment financing is a term loan or lease that lets a farm buy bins, dryers, augers, conveyors and other post-harvest infrastructure and pay it off over a set schedule. These are not small purchases. A drying system, a row of hopper bins and the augers to connect them can easily represent the largest capital outlay on a grain operation outside of land and combines. Financing spreads that cost across multiple crop years so the farm does not have to fund the full amount from a single harvest.
Key takeaways
- Grain bins, dryers, augers and conveyors each fall under different CCA classes for tax purposes, and the distinction matters because bins depreciate at 10% while dryers and augers depreciate at 20%
- The Canadian Agricultural Loans Act (CALA) backs equipment loans up to $350,000 with interest capped at the lender’s prime rate plus 1%, and grain handling equipment qualifies as long as it is not permanently affixed to real property
- Seasonal and skip-payment schedules let you match loan payments to harvest cash flow instead of paying the same amount every month
- A broker can place your file with lenders who understand ag equipment and seasonal revenue, which matters when a single grain handling project involves multiple pieces of equipment on one application
| Item | Detail |
|---|---|
| CALA equipment loan cap | $350,000 per borrower ($500,000 aggregate across all CALA loans) |
| CALA interest rate cap | Lender’s prime + 1% (floating) or residential mortgage rate + 1% (fixed) |
| CALA registration fee | 0.85% of loan principal, charged once |
| Bank of Canada policy rate | 2.50% as of October 2026 |
| Grain dryers, loaders, separators (CCA) | Class 8, 20% declining balance |
| Grain bins, wood or galvanized steel (CCA) | Class 6, 10% declining balance |
| Funding through CBL Financial | Up to $1,000,000, terms from 24 to 72 months |
What counts as grain handling equipment
Grain handling covers everything between the combine hopper and the truck that hauls the crop to the elevator or end buyer. For financing purposes, lenders group it into a few categories.
Storage. Hopper-bottom bins, flat-bottom bins, temporary grain bags and aeration systems. Steel hopper bins are the most common financed item because they last decades and hold resale value well. Flat-bottom bins are larger but typically require a concrete pad and more site preparation.
Drying. Continuous-flow dryers, batch dryers and in-bin drying systems. Grain dryers let a farm harvest at higher moisture content and dry to safe storage levels, which means fewer days lost to waiting for field drying and less risk of spoilage or downgrading.
Conveying. Grain augers, belt conveyors, chain conveyors and bucket elevators move grain between bins, dryers and trucks. These are lower-cost individually but a full yard setup can involve several units.
Monitoring and aeration. Temperature cables, moisture sensors and aeration fans protect stored grain from spoilage. These are often financed alongside the bins they serve.
Lenders assess each piece based on its resale value, useful life and how it fits the farm’s overall operation. Equipment with a serial number, a clear title and a reasonable remaining life is generally financeable whether it is new, used, or bought at auction.
Where grain handling equipment loans come from
The CALA program
The Canadian Agricultural Loans Act is a federal guarantee program where the government backstops 95% of the lender’s net loss on an eligible loan. That guarantee encourages banks and credit unions to lend to farms at lower rates than they would offer on their own.
For grain handling equipment, CALA terms look like this:
- Maximum loan: $350,000 for equipment (aggregate cap of $500,000 across all CALA loans per borrower)
- Maximum term: 10 years
- Interest rate cap: the lender’s prime rate plus 1% (floating) or its published residential mortgage rate plus 1% (fixed)
- Registration fee: 0.85% of the loan principal, charged once
- Financing ratio: up to 80% of appraised value for established farmers, 90% for beginning farmers
The program covers the “purchase, installation, alteration, major overhaul, or major repair” of tools, implements, machinery, and apparatus that are not permanently affixed to real property. Most grain handling equipment qualifies. The grey area is large flat-bottom bins on permanent foundations, which some lenders classify as structures rather than equipment. If you are financing a bin that sits on a concrete pad, ask the lender whether it falls under the equipment cap or the separate $500,000 land and building allocation.
Farm Credit Canada
Farm Credit Canada (FCC) is a federal Crown corporation that lends exclusively to agriculture. FCC offers equipment loans, lines of credit and leasing products directly to farmers across Canada. Because FCC reports to Agriculture and Agri-Food Canada rather than competing for retail deposits, its risk appetite differs from a chartered bank, which can work in favour of seasonal operations or farms that need to finance several pieces of equipment at once.
FCC sets rates per application based on term, credit profile and the equipment involved. If your bank has declined a CALA loan or the amount exceeds the $350,000 cap, FCC is the natural next conversation before moving to the private market.
Banks, credit unions and broker-arranged lending
Chartered banks and credit unions offer both CALA-backed and conventional equipment loans to farms. Outside CALA, rates and terms vary widely by institution. Prairie credit unions with dedicated farm lending teams often know grain handling equipment well enough to appraise it in-house, which speeds up the process.
Broker-arranged financing fills the gap when a borrower’s credit, time in business or deal structure falls outside what banks and FCC will approve. Rates are higher, but approval depends more on the equipment’s resale value and the farm’s cash flow than on a conventional credit score. For a broader comparison of these channels, see our guide to equipment financing companies in Canada.
Seasonal payments and grain handling loans
Grain revenue concentrates in the months after harvest. A bin and dryer system installed in summer needs to pay for itself starting in autumn, not in January when cash is thin. Seasonal payment structures solve this by putting larger payments in the months when grain cheques arrive and reducing or skipping payments during seeding and growing season.
Not every lender offers seasonal structures on equipment loans. CALA loans through banks typically follow a standard monthly amortization. FCC and private lenders are more likely to build a payment schedule around a grain farm’s production cycle. When comparing offers, ask for the total cost of the loan under each payment option, not just the monthly amount. A seasonal schedule at the same interest rate costs the same total interest over the full term; the difference is timing, not total price.
Pro tip: If you are financing multiple pieces of grain handling equipment at once (bins, a dryer and augers as a single yard project), ask whether the lender will bundle them on one application. A single loan covering the full project is simpler to administer and may get a better rate than three separate applications, because the combined collateral value is higher.
Tax treatment: CCA on grain handling equipment
When you finance and own grain handling equipment, you claim Capital Cost Allowance (CCA) on it each year. The CRA assigns different grain handling assets to different classes, and the rates vary more than most farmers expect.
| Equipment type | CCA class | Annual rate |
|---|---|---|
| Grain bins (wood or galvanized steel) | Class 6 | 10% |
| Grain bins (other materials) | Class 1 | 4% |
| Grain dryers | Class 8 | 20% |
| Grain loaders and augers | Class 8 | 20% |
| Grain separators | Class 8 | 20% |
The split matters. A galvanized steel hopper bin depreciates at 10% per year (Class 6), while the grain dryer sitting beside it depreciates at 20% per year (Class 8). When you buy a complete grain handling system, your accountant should allocate the cost across the correct classes rather than lumping everything into one.
The Accelerated Investment Incentive, available for equipment put to use before 2028, enhances the first-year deduction during its 2024 to 2027 phase-out period. A grain dryer in Class 8 gets a 20% write-off in its first year instead of the usual 10% under the half-year rule. A galvanized steel bin in Class 6 gets 10% instead of 5%. Interest paid on the equipment loan is also deductible as a business expense.
For a detailed look at how CCA works across all equipment types, see our guide to equipment financing tax benefits in Canada.
Heads-up: The Accelerated Investment Incentive expires for equipment that becomes available for use in 2028 or later. If you are planning a grain handling infrastructure project, the enhanced first-year deduction may be worth factoring into your timing.
What lenders look at for a grain handling file
Grain handling equipment sits in a specific niche within ag lending. Here is what underwriters focus on.
- The equipment itself. Steel hopper bins, name-brand dryers and standard augers hold resale value well and are straightforward to appraise. Custom or niche equipment with a thin resale market is harder to finance.
- Cash flow and tax returns. Lenders want two to three years of farm tax returns (T1 with the T2042 farming statement) to see revenue trends and net income. A single poor crop year matters less than a downward pattern.
- Land and equipment equity. Farms that own land outright or have significant equity in existing equipment carry less risk. Some lenders will cross-collateralize land to secure a better rate on the equipment loan.
- Credit profile. Personal credit still matters, especially for sole proprietors and partnerships. Below a certain threshold, the file depends more on equipment value and farm financials than on the score alone.
- The project scope. A grain handling upgrade that includes bins, a dryer and conveyors is a larger file than a single auger. Lenders want to understand the full scope, why the farm needs it, and how the new capacity connects to the operation’s revenue.
Financing new vs used grain handling equipment
Used grain bins, dryers and augers are bought and sold regularly across the Prairies, through dealers, auctions and private sales. Most lenders will finance used grain handling equipment as long as it has a serial number, a clean title and reasonable remaining useful life.
The trade-offs are predictable. New equipment comes with a manufacturer’s warranty and known specifications, but it costs more. Used equipment costs less and depreciates more slowly in percentage terms (it has already taken the steepest drop), but it may need repairs sooner. For grain dryers specifically, technology improvements in fuel efficiency and automation can make a new unit cheaper to operate over its full life even if the sticker price is higher.
Whether you buy new or used, from a dealer or at auction, the lender’s decision comes down to the equipment’s appraised value relative to the loan amount. For more on how used equipment financing works, see our guide to used equipment financing.
How CBL Financial can help
CBL Financial arranges equipment financing and leasing for farms and agribusinesses across Canada, with funding up to $1,000,000 and terms from 24 to 72 months. We work with lenders who finance grain handling equipment from any seller, whether that is a dealer, an auction house or a private sale, and who offer seasonal payment structures that follow your production cycle. To see what a loan would look like for your next bin, dryer or yard upgrade, apply online or start with the equipment financing calculator.
Frequently asked questions
Can I finance grain bins through CALA?
Yes, as long as the bins are not permanently affixed to real property. Most steel hopper bins on skid or bolt-down foundations qualify under CALA’s equipment category, with a maximum loan of $350,000. Large flat-bottom bins on permanent concrete foundations may be classified as buildings, which falls under CALA’s separate $500,000 land and building allocation. Ask your lender how they classify the specific bin.
What CCA class do grain dryers fall under?
Grain dryers are Class 8 property with a 20% annual declining-balance rate. That is double the rate for galvanized steel grain bins, which fall under Class 6 at 10%. When you buy a combined system (bins plus dryer), allocate the cost correctly across classes rather than claiming everything at one rate.
Can I finance used grain handling equipment?
Yes. Used grain bins, dryers, augers and conveyors are financed routinely as long as the equipment has a serial number, a clean title and reasonable remaining useful life. Private sales and auction purchases qualify with most agricultural lenders. Through CBL Financial, equipment financing terms run from 24 to 72 months for both new and used equipment.
How do seasonal payments work on a grain equipment loan?
Seasonal payment structures put larger payments in the months after harvest, when grain revenue arrives, and reduce or skip payments during seeding and growing season. The total interest over the loan term stays the same as a standard monthly schedule at the same rate. FCC and private lenders are more likely to offer seasonal structures than banks using CALA-backed loans.
Is it better to finance or lease grain handling equipment?
It depends on how long you plan to keep it and your tax situation. Financing gives you ownership, equity and CCA deductions from day one. Leasing preserves cash and simplifies tax reporting, since lease payments are deductible as operating expenses. Grain bins tend to last decades, which makes ownership more common. Dryers with shorter technology cycles are sometimes leased. Your accountant can model which approach works better after tax. For a detailed comparison, see our guide to lease financing advantages and disadvantages.
Do beginning farmers get better terms on grain handling equipment loans?
Under the CALA program, beginning farmers can finance up to 90% of the equipment’s appraised value, compared to 80% for established operations. That lower down payment requirement helps newer farms that have not yet built up cash reserves from multiple harvests. FCC also has products aimed at young and beginning farmers with more flexible entry requirements.
General information, not financial advice.
