Growing a farm business is not an easy row to hoe! Whether you are starting to build your agricultural business from the ground up or you are looking to expand an existing farming operation, financial demands are high. Farming is an industry notorious for its ups and downs; some years are bumper crops, some years are scorched earth. Managing cash flow and securing the resources necessary to flourish is a challenge for everyone in agriculture. Agricultural leasing is a great strategy to access the equipment you need, when you need it, without impacting the cash flow you need for unexpected expenses and standard operations. There are several benefits for new or growing farm operations by acquiring equipment through an agricultural leasing plan.
The Benefits Of Agricultural Leasing
1. Manage Your Cash Flow
In farming some years are good, others, not so much. Income can fluctuate seasonally and year over year. An equipment leasing agreement means no major cash output to get the equipment you need and smaller, more manageable, regular lease payments. This strategy allows you to manage your cash flow and keep more working capital on hand.
2. Keep Operations Running
In farming operations you need reliable equipment that is ready to work when you are. An agricultural leasing strategy for your business ensures that your equipment is reasonably new and therefore functioning well. You will save time and money by not having to tinker with or repair equipment or have equipment fail when you need it most.
3. Be Cutting-Edge
We are in a time of rapid change and modernization to traditional farming practices. Agricultural operations that want to remain competitive need to position themselves to adapt to evolving best practices and advanced farming technologies. Purchasing your equipment outright impairs your ability to upgrade as often as you need to because you have to leverage your expenditure. But the relatively short terms of an agricultural leasing agreement mean that you can update your operations with new technologies every 2-5 years. And if your growth can’t wait, the very nature of an agricultural leasing agreement leaves room for you to negotiate an upgrade at almost any time over the course of your lease.
4. Adapt Your Practices
There is no denying that farm equipment is expensive. And no two farming operations are exactly alike. The brand and function of a piece of equipment that works for one operation may not serve the same value for another. When you are beginning an agricultural business or you are expanding your business with new revenue streams, you may not know exactly which equipment will work best for you. An agricultural leasing agreement is ideal for farmers who wish to try out types of equipment or certain brands as they streamline their operations and perfect their own methods.
5. Customize Your Leasing Strategy
There are many different types of agricultural leasing agreements. To determine which strategy is right for your business you need to consider such factors as your available capital, your ideal payment schedule, your equipment needs, and your goals for expansion. To learn more about your leasing options, read What Type Of Lease is Right For My Business? And with the right leasing strategy, you will not be bound to specific vendors to secure the equipment you need. You have options for suppliers, wholesalers, private sellers, and even equipment auctions.
Grow It Your Way: Agricultural Leasing With First Capital Leasing
There are advantages to leasing farming equipment over buying it. And the right agricultural leasing strategy will be flexible, customizable, and benefit your new or growing farming operations. First Capital is the choice leasing partner for all of your agricultural leasing and business financing. Learn more about the benefits of leasing and the common mistakes of leasing to make the most informed purchasing strategy decisions for your company.
Have you already purchased expensive farming equipment and you now find yourself looking for ways to increase your available capital? Learn more about First Capital’s sale-leaseback option.
First Capital Leasing is a full-scope financial services provider with the knowledge and experience to create tailored financing solutions that meet your needs and your goals for your company. We can help you figure out which strategy can support your current operations now and in the future. We are based in Calgary, but serve business across Canada. For easy application and quick approval, fill out our online application. You only need to apply once and First Capital leasing will continue to be your financing partner for all your business equipment needs. Approval can usually be completed in less than 4 hours!* If you are ready to explore loans and leasing for your business, call our team at First Capital Leasing at 1-888-251-3644 or fill out our contact form today.
* Subject to credit approval
Q: I already purchased my farm equipment and now I wish I had leased it. What can I do?
A: First Capital Leasing offers sale-leaseback plans. You sell the farming equipment you own to us, and we lease it back to you at competitive rates. This frees up significant working capital that can be invested in expanding your business.
Q: How does my business explore agricultural leasing with First Capital?
A: Our process is simple:
- Choose the equipment and the seller of your choice. Confirm the full asset details, along with the cost.
- Complete our online application, which is instantly submitted to our credit team. Existing customers do not need to re-apply.
- Once approved, a First Capital team member will contact you to discuss your financing options. We will then contact your supplier to arrange for invoicing of the purchase. Documentation is then provided for your review.
- Upon receipt of all required documentation, our funding team will work on payment remittal to the supplier. We can accommodate any prepayment or deposit terms the seller requires.
Q: Why can’t I lease my farming equipment directly? Why work through First Capital Leasing?
A: You certainly can lease your farming equipment by yourself, but your supplier may not be as flexible as we are. We offer tailored financing solutions at superior rates that perfectly align with your budget and timeline.