Farm Equipment Financing
Farm equipment financing is simply financing, or loans, designed to make the purchase of farm equipment easier for agricultural companies. Farming is one of the most essential industries in America. But surprisingly, feeding a nation isn’t always lucrative. The price of running a farm can be staggering, and farm equipment is a huge part of that cost. Agricultural financiers like AgDirect and FarmBureau can step in and make it easy for you to get the equipment you need without selling an arm and a leg in the process.
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How much interest you pay will vary depending on your credit score, the cost of the equipment you intend to finance, and whether or not you chose a fixed or variable interest rates. On the low scale, if you’re looking for financing under $10K, you can expect to pay between 6.24-7.50%. Or, if you’re looking to finance over $200K you can expect to see rates between 3.99-4.99%.
Rates can sometimes decrease with the number of years in your financing term, so you’ll be paying less interest on a 5-year finance plan than a 2-year plan. But it’s worth noting that in the long run, you’ll probably end up paying more interest on the 5-year plan because you have more payments to pay interest on.
There is generally no minimum credit requirement for farm equipment financing. However, the financer will most likely ask you for more information such as financial history to try and get some idea of the risk of lending to you, particularly if your credit score is low. A low credit score will also mean a higher interest rate, and you may also be asked to sign a personal guarantee.
Choosing the right borrowing option is essential, and it’s wise to take your time, check out as options as you can, and even speak with an expert to be sure you’re on the best path for your business. Running a farm is not only hard work, but expensive too. With the right lender, however, you can make it worth your while.