The multi-billion-dollar farm equipment industry is on the rise. Are you going to get involved? Are you already working on a farm that requires the use of heavy equipment? If you answered yes to either question, you know just how important the right equipment can be. This is oftentimes the difference between success and failure. It is oftentimes the difference between doing things the right way and just getting by.
Loans for your Farm Equipment
Although many people lump “farm equipment leasing and loans” into one category, these are two entirely different approaches.
When you lease farm equipment you are doing nothing more than paying the lessor for the use of the asset.
When you take out a loan, though, you are paying a little bit every month so that you can eventually own the equipment in the end.
There are pros and cons to both approaches.
As you know the farming industry can be unpredictable. There may be years where your business is booming and others where it is a complete washout. When having to depend on mother nature and the economy to secure your financial situation there can be some difficulties. With this said many farms do not have large amounts of cash laying around to allow them to make much-needed equipment purchases. This is why Farm Equipment Loans are a great option for your business.
How Farm Equipment Loans Work
Rather than scrambling to put together the capital needed to pay for farming equipment, you can turn to your business bank or equipment financing companies to meet your needs. With a small down payment, you can walk away satisfied that you will be able to get the equipment you need. With fixed interest rates and repayment terms, you will be able to make low monthly payments while utilizing the equipment to keep your farm operating smoothly.
Financing Approval
Depending on the life of your farming business you may need to put your personal credit on the line to obtain financing. Lenders are looking for a clean credit history for approval. If you or your farming business have a poor credit history you may require a cosigner and/or a larger down payment for approval, you may also face high-interest rates. By submitting the proper financial documentation you could receive financing approval within 2 business days.
Starting the Financing Process
- Find the equipment you would like to purchase and make negotiations with the supplier to get the best price.
- Submit an application along with any requested financial documentation to the lender.
- Review the terms of the equipment loan
- Make negotiations to ensure you are getting the best loan terms
- Sign the contract with fixed interest and terms and start utilizing the equipment to grow your farm business.
If you are confused and unsure of which option is better, here are five questions to ask yourself.
- Do I have enough upfront cash for a down payment? This is oftentimes required if you are interested in buying farm equipment.
- Can I make the purchase with cash? If you have enough money to buy the equipment outright it could be advantageous in the long run. Not only are you gaining full ownership of the equipment from the start, but you are avoiding interest payments.
- What are the terms of the loan that is being offered to me? This includes everything from the interest rate to the amount of time you have to pay back the money.
- Can I save money every month by opting for a lease? Generally speaking, lease payments are smaller than loan payments. This may be an important detail if you are trying to keep your expenses under control.
- Will you want to trade in your farm equipment in the future? With a lease, once the term runs out you can turn the equipment in and walk away. At this point, you can opt to deal with the same company and sign another lease agreement for updated equipment.
When you answer these five questions you will find it easier to decide between leasing farm equipment and taking out a loan.
Regardless of which option you choose, it is important that you focus on two things:
- Getting the equipment necessary to keep your farm running at optimal efficiency.
- Making sure that you are 100 percent comfortable with the financial side of the deal.
We have helped people get farm equipment loans for:
- Tractors or Mowers
- Seeders
- Planters
- Drills
- Pumps
- Mulchers
- Transplanters
- Fertilizers
- Balers
- Combines
- Chisel Plows
- Cotton Pickers
- Seed Drills
- Sprayers
- Harvesters
- Tillers
- Rollers
- And much more…
Contact us using the form to the right and we will find the best financing option for your farm.
