Tractors, plows, irrigation systems and other farm equipment can be very expensive. Fortunately, there are financing options for a range of farm needs.

Lenders that specialize in agriculture typically offer a variety of loan and leasing options and can provide quick access to funds. They may also have more flexible qualification requirements than traditional lenders.

Spread the Cost Over Time

There are a lot of moving parts to the agriculture industry, and equipment is a big part of that. When equipment fails or is outdated, it can halt work and strain the finances of a farm. By securing financing, agricultural equipment purchases can be spread out and made more manageable.

Financing companies that specialize in the farming industry offer a variety of financing options with terms and conditions that compliment the needs of a particular business model. They also understand that the farming business can have volatile cash flow and can provide a degree of financial stability with predictable, regular payments.

Depending on the type of finance arrangement, farm equipment loans can also offer unique tax benefits. Consult with your accountant or advisor to learn more.

Ownership of the Equipment

Farm equipment is a crucial part of your operation, but it can also be costly. That’s why many farmers turn to agricultural equipment financing and loans to get the machinery they need without breaking the bank.

There are a few different options for farm equipment loans, including captive finance companies (financing arms or branches of the equipment dealer or manufacturer) and banks that specialize in lending to agribusiness. Many of these lenders offer various farm equipment loan programs with varying terms and interest rates.

Some of these loan programs include microloans designed to help small and beginning farmers, as well as nontraditional and niche farm operations, such as truck farms and Community Supported Agriculture (CSA) operations. These types of loans often have lower maximums than standard operating or farm ownership loans and offer flexible repayment terms. They may also have less paperwork and stricter use cases than other loan programs.

Fixed Monthly Payments

The best farm equipment loans financing is often fixed and offers a payment schedule that aligns with the seasonal cash flow of your business. This can reduce the financial stress of a large, up-front payment and allow you to budget more easily.

Financing is available for new and used equipment. For example, AgDirect can help finance used farm equipment with 2 to 7 year terms and delayed payments. They also offer refinancing which can help free up working capital.

Other sources of agricultural equipment financing include the U.S. Small Business Administration (SBA) and the Farm Service Agency (FSA). Both programs require extensive documentation, so you should prepare for a lengthy application process.

If you need quick access to funding or don’t meet the qualifications for a government loan, there are many online lenders that provide fast and flexible financing for agricultural equipment. Some offer a streamlined application and funding within a few business days. However, these lenders may charge higher interest rates than traditional banks and credit unions.

Tax Benefits

Having an equipment loan can make it easier to take advantage of tax incentives, such as Section 179 bonus depreciation. This allows you to write off the cost of your tractors, combines and other large purchases on your taxes, which can help offset the costs of your financing.

You can find farm equipment financing through several sources, including government loans and lenders that specialize in agribusiness. You can also find financing through captive finance companies (a lending branch or arm of an equipment dealer or manufacturer) and through alternative online lenders that offer competitive financing programs.

When you apply for a farm equipment loan, lenders will look at several criteria to determine whether or not they can lend you money. One of the most important is your business credit score. Nav has several ideas on how you can improve your credit to make it easier to qualify for financing. This will save you time and make it easier to get the funding you need to buy equipment for your operation.