Farm equipment financing is available through our equipment financing network and can be arranged in the form of a loan or lease financing solution.
With farm equipment, there can be several different financing options to consider as agricultural equipment financing is a large industry with many lenders and leasing companies committing part of their available funds to this type of borrowing or leasing.
Most farm equipment manufacturers will offer some form of in house equipment financing solution, whether it will be through their own financing arm or through a third party arrangement of some sort.
And while the posted effective interest rate for manufacturer based financing can be very attractive, its going to be important to understand the cost of acquisition from the manufacturer or dealer with and without their financing as the net difference on the pricing of the asset can be substantial. Put another way, a cash purchase can be considerably different from an in house financed purchase. So if you’re getting the financing somewhere else, even at a higher interest rate, the net cost to you can be considerably cheaper at times, so its important to do the math before deciding on a manufacturer’s financing option.
Farm equipment financing options will also vary with the size of the capital requirement, the type of equipment, the time in business, and so on.
With respect to capital requirements, there are agricultural financing companies that will not consider any request under $250,000 and there are others that won’t look at anything over $150,000. So its going to be important to make sure you’re speaking to a farm equipment financing source that is best suited for the overall requirements of any specific financing request.
Especially for equipment leasing requests under $100,000, farm equipment loans and leases can be arranged within a day or two of a financing company receiving a completed application package.
For larger financing requests, the time period may be extended by a few extra days as its not unusual for a lender or leasing company to require more than one level of deal review for larger requests. But even for larger deals, the process is most often completed within one year of application.
Used farm equipment financing can also be arranged through both licensed dealers and private resellers.
The process for used equipment funding can also take a bit longer as the lender will typically do a market value assessment of the asset as well as perform background checks for registered security in the case of a private sale.
Equipment loans through banks will typically take the most time due to the nature of how banks manage these applications. That being said, the extra application time can be well worth it as banks and other main stream financial institutions also provide some of the lowest rates on equipment financing in the market.
The key to any farm equipment financing process is working with the lender or leasing company that can best meet your requirements in the time you have to work with.
If you have a farm equipment finance requirement, I recommend that you give us a call so we can quickly go through your situation with you and discuss available financing options.
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