For farm equipment leases, we offer AgDirect® equipment financing available through equipment dealers, at auctions and for private party sales. AgDirect® can develop a custom finance solution to fit your individual situation.
AgDirect® is an equipment financing program offered by Farm Credit Services of America and other lenders, including participating Farm Credit System Institutions.
Leasing offers attractive fixed costs with lower payments, which in most cases, are tax deductible.
Conserve your cash with low or no down payment, up to 100% financing.
Flexible lease structures, payment schedules, end-of-lease options and maturity dates let you tailor the lease to your needs.
To demonstrate the potential benefit of a leasing program, we’ve provided a purchase vs. lease comparison, illustrating different ways to expense a farm building. Leasing allows a balanced tax management strategy as compared to a traditional depreciation or bonus depreciation.
A customer is constructing a new farm building. Assume a cost of $300,000 and first rental payment at close with a 20% purchase option.
| Year | Purchase: 60% Bonus Depreciation Plus Interest | Purchase: Non-Bonus Depreciation Plus Interest | Lease: Payment |
|---|---|---|---|
| Year 1 | $184,500 | $11,250 | $47,600 |
| Year 2 | $28,183 | $41,177 | $47,600 |
| Year 3 | $26,146 | $38,164 | $47,600 |
| Year 4 | $24,100 | $35,218 | $47,600 |
| Year 5 | $22,021 | $32,304 | $47,600 |
| Year 6 | $19,779 | $29,292 | $47,600 |
| Year 7 | $17,476 | $26,274 | $47,600 |
| Total Expensed at Year 7 | $322,204 | $213,681 | $333,203 |
Calculations based on 8% effective loan/lease rate comparison. Implied rates stated herein are for illustrative purposes only to assist in comparing lease payments to the cost of a loan. They are not intended as, and should not be relied on for, tax, legal, or accounting advice. Parties should consult their professional advisors regarding appropriate treatment of any lease transaction.
We welcome the opportunity to talk about the leases we offer and to determine the best type of financing for you. For more information on leasing, contact your local AgCountry office.
We finance every aspect of a farm and ranch operation. Discover the difference and check out our other products.
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