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.
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
- Chisel Plows
- Cotton Pickers
- Seed Drills
- And much more…
Contact us using the form to the right and we will find the best financing option for your farm.
Chris Fuller went to the University of South Florida and has worked in the financial sector for over 20 years. He has extensive experience in all aspects of personal and small business lending, from personal loans, equipment finance to cash flow based solutions for small mom and pop businesses, and large corporations.