The Basics of Financing Farm Equipment
Every farm, large or small, relies upon good-quality and dependable farm equipment to function. However, if you’ve got an old machine that needs replacing or if you’ve decided you need a new piece of equipment to perform a specific task, you may find yourself overwhelmed by the high costs.
Fortunately, there’s a simple solution that many farmers employ to get the farm equipment they need: financing. Eastman Equipment Company is your Georgia farm equipment dealer and financier. Follow the steps below to successfully finance your next piece of farm equipment.
Establish Your Equipment Budget
First, you’ll need to figure out just how much you can afford to spend, not only up-front, but also over time. Pretty much every potential lender is going to require that you pay anywhere from 10% to 20% of the full cost of the farm equipment up-front, which means you’ve got to save that amount in advance. Do some research online to determine the average prices in your area so you can get a ballpark figure.
You’ll also want to use a loan calculator to figure out how much you can afford to pay off per month. Don’t forget that you’ll need to factor in storage, maintenance and general upkeep costs each month as well.
Know Your Loan Options
When looking for a loan, there are two primary options available to you: secured and unsecured loans. Each one has its drawbacks and advantages, so it’s important to know which one you may qualify for.
Secured loans use your farm equipment as collateral, which is a term for a security against the loan. If you fail to make your payments on time and in full, the lender can repossess your farm equipment on a secured loan to recoup their losses. Secured loans do come with higher borrowing amounts and lower interest rates, so there is an advantage to them if you can ensure you’ll always be able to pay on time.
Unsecured loans do not have any requirement for collateral so your farm equipment can’t be taken away from you if you don’t pay it. However, these loans come with lower borrow rates and higher interest rates, and you’re still on the hook to creditors for anything you owe.
Select Your Lender
Once you’ve made your budget and analyzed your options, it’s time to find your local lender! We here at Eastman Equipment Company maintain a finance department in-house so you can conveniently get your loan and your equipment in one place. There are other options available to you, though, including banks and credit unions, and it’s never a bad thing to explore all your financing avenues before you make a decision.
Our financing and credit department can assist you with your farm equipment purchase. Contact us on our website or talk to one of our staff members in person to learn more about our financing options. Ready to shop? Visit our dealership in Eastman, GA, to check out our fine selection of new and used farm equipment for sale. Eastman Equipment Company proudly serves the communities of Warner Robins and Dublin, GA.