How to Finance Farm Equipment

Farm equipment makes it easier and quicker to maintain a farm or an acreage, but it may be tough to gather the cash to buy it. There are several ways to finance farm equipment; but they require sound planning and effort. Read on to learn more.

Instructions

Difficulty: Moderately Easy

Things You’ll Need:

• Business plan including balance sheet and cash flow

1. Decide what equipment you need and can afford. Buy used or new, but check out used equipment thoroughly to make sure it is not damaged or worn out.
2. Put together a business plan stating why you need to finance farm equipment and how you plan to repay the loan. Make a balance sheet and a cash flow for your farm.
3. Shop for equipment that fits your farm and repayment ability. Look on local sales lots, in the newspaper classifieds or do a search for farm equipment on the Internet.
4. Ask the dealership if they have financing plans--many do. Ask a private owner if he will consider taking payments for the equipment and what interest rate he would carry on the loan.
5. Call your local bank and set up an appointment with a loan officer. Bring your business plan and the information on the equipment you want. Be prepared to show that you have repayment ability for the equipment you want to finance.
6. Go to the C.H. Brown Company or Tractor Financial websites and fill out their on-line application for financing. C.H. Brown finances equipment all over the United States and has equipment for sale. Tractor Financial will help you locate an approved dealer and has a leasing plan along with financing.

Tips & Warnings

• The United States Department of Agriculture offers low-interest insured loans to small and beginning farmers. Ask the bank loan officer if you qualify.
• If you have good credit and repayment ability, use a credit card to finance a used equipment purchase. Ensure that the interest is lower than what you could get at a bank or dealership and there are no hidden costs. Make all payments on time.

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