Proven Farm Equipment Loans to Supercharge Your Business in 2022
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Agriculture, food, and related industries contributed $1.109 trillion to the US GDP in 2019, this makes up for up to 5.2 percent of total GDP. Despite the fact, farmers account for only 1.3 percent of the US labor force with more than 2 million farms across the country. Meanwhile, workers in the agriculture business accounted for 70% of the American labor in 1840.
The farming industry in the United States has undergone a massive turnaround. Farm machinery is becoming increasingly popular and useful for agricultural purposes. To be a major participant in the agriculture industry and with a high level of productivity, you need good farm equipment, technology, and facilities.
Farm equipment, on the other hand, can be quite costly. You’ll need adequate cash flow to buy them. This is where agricultural equipment financing and loans come into play. You can acquire farm equipment loans from Upwise Capital for your farm needs. In addition, you may buy or lease agricultural machinery that meets your needs without breaking the bank.
Continue reading to find out more on how to get the best farm equipment financing and loans.
What are farm equipment loans?
Farm equipment loans administer the much-needed financing to farmers that need to purchase agriculture. Typically an equipment loan tends to be a short-term loan, these loans can range from 6months to 2years. With these types of loans, the equipment you are financing will be put up for collateral till paid off. The lender reverses the right to sell the equipment if the borrower defaults on the loan.
How can farm equipment loans work for you?
Farm equipment loans and financing offer a number of benefits that help you operate your farm more effectively as a farmer.
Here are some examples of how agricultural equipment loans might benefit you.
Provides immediate use of equipment
For the smooth operation of your farm, you require working machinery at all times, without the risk of breakdowns or work disruptions. Because farming is a time-sensitive industry, missing one day of farm work can have significant ramifications for your output. Furthermore, obtaining traditional financing, such as a bank loan, and making a down payment to purchase equipment can take time. As a result, agricultural equipment financing can be advantageous.
Keep up with the latest technology
New technology is put into farm equipment every year to improve agricultural practices. However, a farmer who purchases equipment will be trapped with a machine that is out of date in years to come. Furthermore, the resale value would plunge much further with time. And you’ll agree that’s a bad investment. Tractor equipment financing, such as leasing, is a good way to stay current with technology. All you have to do is lease the equipment you need for a certain time. So that you can lease the most recent version when it becomes available. Isn’t that a wise decision?
Cheaper and effective loan option
When compared to other types of loans, farm equipment loan rates are less expensive. In addition, obtaining bank loans for the purpose of purchasing equipment might be challenging. It’s also frequently accompanied by lengthy processing times and unfavorable lending terms. As a result, taking out a bank loan to buy farm equipment is not your greatest option.
What farm equipment loans and financing options are best for you?
There are numerous farm equipment loan alternatives available to you, whether you are upgrading or maintaining your equipment. I recommend that you research which farm equipment loans and financing options are appropriate for you.
Farm equipment loans come in two options: you can lease it or buy it with agriculture farm equipment financing.
When you finance it, once the loan is paid off, you own the equipment. When you lease equipment, though, you must either return it or make a balloon payment to purchase it at the conclusion of the lease term.
When you don’t need the equipment for a long time or plan to upgrade it every few years, leasing may be a better option. You are protected from depreciation by leasing.
Consider the following farm equipment loans and financing options.
Farm Equipment Financing
Agriculture farm equipment finance can cover up to 100% of the cost of the machinery you want to purchase. It’s a great option if you need to buy new equipment or replace old equipment. Since, you can get a loan approval in as little as two days, allowing you to get back to work as soon as possible. You can use your recently purchased equipment as collateral.
Learn more about farm equipment financing
SBA Loans
SBA loans offer funds to start a new small business by an aspiring or current business owner. If you intend to pay cash for your agricultural equipment, you can take advantage of SBA loans.
SBA loans can be used to cover a variety of costs associated with farming, including gasoline, insurance, and family living expenses, to mention a few. The fact that they can cover farm equipment purchases is, of course, the most essential factor here.
SBA loans are long-term and have low-interest rates. It may take 5-7 days for the loan application to be approved compared to traditional bank loans that take months.
Learn more about SBA loans
Working Capital Loans
If you want to buy farm equipment, you can use working capital funding or a merchant cash advance. Once you’ve obtained the working capital loan, you’ll repay it by withholding a portion of your daily credit card deposits. Working capital is a simple and quick way to acquire a cash advance for your business without having to put up any security. Even if you have farm equipment financing bad credit, this is an excellent choice for farm equipment financing.
Learn more about Working capital loans
How to get farm equipment financing?
Documents You’ll Need to Apply
- Completed Application
- Driver’s License
- Voided Business Check
- Business Bank Statements (Last 6 Months)
- Credit Score
You may also be requested to provide the following for larger dollar amounts over $100K or if a secured line of credit:
- Balance sheet
- Profit & Loss Statements
- Business Tax Returns
- Personal Tax Returns
- Account Receivables Report (if securing AR)
- Inventory List (if securing inventory)
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