“Grow” Your Agricultural Business
As a farmer in today’s economy, you need to get creative to make the most of your budget. Equipment leasing is one way to ensure you have the equipment you need without blowing your budget. This can be a low-cost, low-maintenance alternative to purchasing. The benefits don’t stop there either.
Here are 6 benefits to leasing farming equipment instead of purchasing it.
1. Keep your farm equipped
As the economy shifts with changing times, some industries benefit and others are left behind. The agricultural economy is tough right now, which means you need to do everything you can to use your money effectively and keep your business up and running.
Time is everything when it comes to farming, and you need your machinery to stay up and running. Agricultural equipment leasing can be a good choice in this case because it allows you to have working machinery at all times, where breakdowns and short crops may otherwise leave you high and dry.
2. Stay up to date with technology
There’s only so much farming equipment you can buy. If you’ve just purchased a tractor, chances are it’s going to be a while before you upgrade. However, technology never stops, so you’re constantly missing out on new technology.
With equipment leasing, you can actually upgrade just about anytime. You just release your current equipment and start leasing an upgraded model.
If you’re the type that likes to see the lease all the way through, that’s ok too! Leases run in relatively short terms. Usually 2 – 5 years is all that’s needed to “complete” a lease.
All this means is you can actually keep up with newer farming technology, which is a huge advantage if you’re looking to stay ahead of the curve. That’s not all—you also won’t have to worry about losing a considerable chunk of cash every time you want to sell your old equipment and upgrade.
3. Experiment with equipment
Farming is a delicate operation; every farm has different needs which require different methods and equipment. When you purchase farming equipment, you’re committing to it until you can afford to upgrade. When you lease, you’re only obligated to hang onto equipment until the term is over, which means you’re free to experiment with a wider selection of equipment. Leverage the quick turnarounds to learn faster and adapt quicker.
4. Make smaller payments
Unless you’re paying for your farming equipment with cash, you’re going to be making monthly payments whether you lease or buy equipment. Usually, you’ll be paying less to lease equipment, and you won’t have to jump through as many hoops to qualify. Plus, leases are always somewhat negotiable, so you can always work with your lessor.
5. Improve cash flow
For farmers, cash flow comes from the latest crop. The problem is that crops are erratic, and a crop that doesn’t go well can really put a damper on your cash flow. Expensive equipment means large down payments, and that doesn’t help cash flow either.
Leasing farming equipment allows you to keep more working capital on hand which can be used to improve your business in various other ways.
6. Receive tax deductions
Taxes are the bane of every business owner, but there are always ways to make them a little more bearable. When you choose farming equipment financing over purchasing, you can write off your full payment as a business expense. This isn’t specific to leasing, but it’s an added benefit since you won’t have to spend as much in the first place.
The Final Verdict
The bottom-line is that leasing your farm equipment greatly reduces your financial risk. Putting out large amounts to purchase equipment just puts you into a precarious position. Nobody ever goes out of business when they have extra cash in the bank. As a farmer, you know how quickly one season can change your capital funds.
See for yourself how affordable leasing could be for your farm. Request a free lease estimate. It takes less than 60 seconds!