Agriculture Equipment Leasing Provides Great Access to Capital
For farm producers and agricultural processors, its always a challenge to find enough capital to fund the fixed infrasture required in this capital intensive industry.
Sources of agriculture equipment leasing comes to the rescue with high leverage equipment leases on most makes, models, and types of ag and processing equipment.
In term of leverage, its not unusual for a farm operation to be able to secure 90% plus of the equipment acquisition costs. Add in the cost of transportation, assembly, and training, the real financing costs can far exceed the cost of the asset being acquired.
A couple of reasons that the leverage can get so high is due to the fact that lease companies are the actual owners of the equipment, affording them more control in default situations, and due to the strength of the age equipment resale market that provides lessors with a predictable liquidation path way for the equipment they end up getting back at the end of an equipment lease term or are forced to take possession of in situations of lessee default.
Rates are also typically very strong with higher equipment financing requirements commanding lower interest rates and higher levels of lender and lease company competition for the business.
Used equipment can also be financed, but typically at higher rates of interest and shorter leasing terms due to the higher risk of equipment obsolence associated with used equipment. That being said, many forms of ag equipment can have a long useful life that can support a longer leasing term.
