Procuring new farming equipment constitutes a challenge for most farm owners. Given potentially steep costs, farmers often do not have the funds to buy enough farming equipment to generate a return on investment. As a result, they often find themselves in a catch-22: how can they grow crops and make money if they do not have the money to buy farming equipment in the first place?
The solution lies in equipment leasing, which allows farmers to operate high-end equipment at a fraction of the cost of purchasing machinery outright..
Are you a farm owner operating in Alberta? First Capital Leasing offers competitive equipment leasing plans for all farmers in the region. Get your equipment lease approved today and you will be harvesting your bounty before you know it!
Why You Should Lease一And Not Buy一Your Farming Equipment
There are 2 golden rules that every new farmer should know: :
- The growing season does not wait
- Your farm is as productive as your farming equipment allows
In other words, a bountiful first-year harvest depends much on whether you can procure good, reliable farming equipment in time for the growing season.
If you were planning to buy your tools and assets, expect to pay hundreds of thousands of dollars一money that you may not have.
This is where equipment leasing comes in. By merely borrowing the necessary equipment, you can get to work without having to pay its full price. After all, you do not need to own your tractor or baler for it to perform!
Consider 2 scenarios. In the first scenario, you take a massive loan from the bank to buy all your farming equipment. You manage to reap a plentiful harvest, but your profits are nowhere near close to offsetting the financial hit you have taken. You go further in debt during the winter, hoping for generous harvests for the next 5 years so that you can finally pay off the money you owe.
In the second scenario, you lease everything you need instead of taking out a traditional loan. You do not own the equipment you operate, but your monthly payments are well within your budget. This, in addition to the profits you have reaped from your harvest, ensures you have plenty of capital to get you through the winter. By the end of the next growing season, you would be in a significantly better financial position than you were a year ago.
But What About Owning Your Farming Equipment?
The tradeoff with leasing, of course, is that you do not get to own what you use. But farming equipment is not like an apartment that you give back to the property owner at the end of your lease with nothing to show. Indeed, by the time you return your farming equipment to the lessor, you would have made significant money off it一almost certainly more than what you spent to operate the equipment for the allotted time.
When it comes to farming equipment, it is not ownership but leasing that leads to profits. A combine that you have leased cuts the same amount of grain as a combine that you have bought. Paying tens of thousands more just to keep the same machine forever is not worth it.
Ownership Is Actually A Trap
Ownership should only be sought if the asset in question increases in value over time. This is not the case for farming equipment.
For instance, if you sell a tractor that you bought a few years ago, it will only command a fraction of the price you paid. Keeping it for yourself is an alternative, but its performance is only going to degrade with time. Regardless of your decision, you will either end up selling at a loss or being stuck with obsolete equipment.
Leasing allows you to avoid this dilemma altogether. When your lease ends, you will neither be left with negative equity nor with a contraption that nobody really wants. Instead, you will be left with the profits your leased equipment has generated一money that you can use to lease an even better machine and make more money in the future.
Affordable Farming Equipment Leasing In Alberta
If farming equipment did not provide any return on investment or actually increased in value over time, then ownership would be the way to go. However, because of its profit-generating properties and its tendency to rapidly depreciate, leasing your farming equipment is almost always the superior financial decision.
Now, you may be wondering where you can get favourable lease terms for your farming equipment. If you are a farm owner in the Calgary area or from across Alberta, your first and only stop is First Capital Leasing. We specialize in buying the farming equipment of your choice and making it affordable to you. Call us at 403-255-5508 or fill out the online contact form to grow your equipment inventory today.
Q: What if I want to lease my farming equipment after having purchased it?
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 which can be invested in expanding your business.
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.
Q: How do I start working with First Capital Leasing?
A: Simply fill out this one-time online contact form to partner with us.