Leasing for Farmers
Farm and Agricultural Leasing for Equipment, Buildings, and Infrastructure
Leasing can be a practical alternative to purchasing, especially for operations looking to preserve capital and maintain flexibility. Instead of tying up cash in large upfront purchases, leasing allows you to access the assets you need while keeping working capital available for day-to-day operations.
What Are the Benefits of Using AgSouth Leasing on Your Farm?
- Up to 100% financing for leases
- Quick credit approvals when opportunities arise
- Improve cash flow with lower upfront costs than traditional loans
- Structure payments that fit your operation
- 2 to 10 year terms based on type of asset
- Preserve capital for other operational needs
- Purchase the assets later through our lease buy-back program
- Provide potential tax advantages depending on your operation
What Can You Lease for Your Farm or Operation?
- Metal buildings and shelters
- Tractors
- Specialized farm equipment
- Farm implements
- Dairy equipment
- Grain bins
- Irrigation systems
- Vehicles and fleet vehicles
- Processing, packaging, and material handling equipment
Comparing Lease vs Loan for Farm Businesses
Understanding the difference between a lease and a loan can help you to ask more informed questions and ultimately make a business decision. While each asset purchase may look a little different (metal building, irrigation pivot, equipment, etc.), below outlines a comparison of a lease vs loan for a piece of equipment may help you better understand the general differences.
Financing Equipment Example
| Feature | Lease | Loan |
| Upfront cost | Only first payment and fee | Down payment required |
| Tax benefits | Lease payments often deductible as operating expense, which can lower taxes | Depreciation and interest |
| Cash flow impact | Lower monthly payments, with one residual (final lease) payment | Higher monthly payments, with one higher up-front down payment |
| Appraisal | No appraisal fees | Potential appraisal fees |
| Collateral | Only the asset being leased | Additional collateral including what is being purhcased |
Frequently Asked Questions
How does leasing help optimize a farm business financially?
Leasing can help preserve working capital, improve cash flow flexibility, and allow producers to expand without large upfront costs.
When does leasing make more sense than traditional financing?
Leasing may be a better option when a farm business is expanding, managing seasonal cash flow, or prioritizing liquidity.
Can leasing be used alongside traditional farm loans?
Yes. Leasing is often used in conjunction with traditional financing, allowing farm businesses to match the right capital strategy to each asset.
Is this the same as leasing farmland?
AgSouth Leasing is for equipment, facilities, and operational assets as a financial strategy for farm businesses - not leasing land to farm on.
Contact a Leasing Agent
North Carolina - 704-472-4622, Miles Hamrick
South Carolina - 803-341-6961, Tim Schriver
* Disclaimer - If you purchase equipment in the 4th quarter of the year, your eligible depreciation may be negatively affected. To avoid potential depreciation deduction issues, considering leasing the equipment--lease payments are generally 100 percent tax deductible. See your accountant to determine if a lease is better for your tax situation.