Farm Business Optimization: Using Leasing as a Strategic Alternative to Traditional Financing
How Strategic Asset Decisions Strengthen Farm Cash Flow and Growth
Thinking about building new facilities or upgrading your equipment but worried about tying up your capital? At AgSouth, we offer leasing as a smart, flexible alternative option in conjunction with traditional financing—designed to keep your cash flow strong while giving you the tools and space you need to grow. With competitive terms and financial advantages tailored for farming operations, leasing can help you expand without the heavy upfront costs.
Leasing as a Tool for Farm Business Growth
Miles Hamrick, Leasing Originator for AgSouth Farm Credit, emphasizes that “Leasing is a complementary alternative to financing, and many producers do not know that it’s available.”
Although leasing is a little-known financing option, Miles shares, “Once borrowers understand the flexibility and structure of leasing, they are excited about the potential it creates for them to expand their operation.”
What Farm Assets Can Be Leased?
Facilities and Operational Buildings
An excellent option for expanding your operations with buildings like packing sheds, barns, cold storage, greenhouses, and production facilities.
Equipment and Production Assets
New or used equipment such as tractors, irrigation systems, processing equipment, packing equipment, fertilizer spreaders, grain bins, and more.
Titled Vehicles for Farm Operations
For transportation and logistics needs such as fleet vehicles direct from the manufacturers like Ford, GM, and Dodge.
Key Financial Benefits of Leasing for Farm Operations
Leasing offers many benefits, which can allow flexibility and financial freedom. Miles shares, “You can choose terms from 2–10 years based on the type of asset and what best matches your desired goals.” He further tells borrowers that payment structures are designed to fit your cash flow, and the end of lease purchase amount, or residual payment, can be customized.
Quick credit approvals on leases can help you act fast when opportunities arise. Added benefits are the potential tax advantages plus the option to purchase the assets later through our lease buy-back program. As a result, leasing becomes a smart strategy for both immediate progress and future growth.
Leasing vs. Financing: Comparing Capital Strategies 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.), Miles helps outline a comparison of a lease vs loan for a piece of equipment may help you better understand the general differences.
| 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 higher 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 purchased |
Why Leasing Can Support Long-Term Farm Business Optimization
Bottom Line: Leasing with AgSouth is not just financing—it is a strategy for growth. You will have peace of mind knowing you can expand your operation at an affordable cost.
Farm Business Optimization FAQs: Leasing and Financing Options
Is this the same as leasing farmland?
No. This article focuses on leasing equipment, facilities, and operational assets as a financial strategy for farm businesses—not leasing land to farm on.
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.
Ready to Explore Smarter Capital Strategies for Your Farm Business?
Visit our AgSouth leasing page and contact one of our experienced leasing agents to help start you on your leasing journey. AgSouth has leasing agents in Georgia, North Carolina and south Carolina that are ready to talk you through your options.