Use Forestry and Agricultural Equipment Financing to Boost Productivity

Agriculture and forestry are two industries which:

1. Employ a large number of people
2. Fulfill almost all our essential requirements.

For the welfare of whole of mankind, it is essential that these two industries function efficiently. Efficiency is closely linked to the use of the latest technology, machines and other heavy equipment. Improvement in efficiency does not come cheap.

Forestry and agricultural equipment financing is the best way to overcome the problem of lack of money.

Use of heavy duty equipment is not unheard of in agriculture and forestry. Hectares of wheat cannot be reaped overnight unless tractors, reapers and other proper machinery are used.

A few strong men may cut a tree very quickly but lifting and transporting the tree over long distances is best left to cranes and trucks. Heavy machinery and equipment is essential for agriculture and forestry. That is the reason why forestry and agricultural equipment financing is considered so important.

Parameters Which Determine Requirements

One cannot adopt a ‘one size fits all’ approach with respect to farm equipment. The requirement of machinery depends on:

o The type of industry
o The function it serves
o The scale of operations
o The capacity of the individual enterprise

Modern Agricultural practices require equipment like:

a) Grain Harvesters
b) Grain Threshers
c) Cleaners.
d) Hay bailers
e) Tractors
f) Power Tillers
g) Ploughing equipment
h) Planting equipment

The use of equipment contributes a lot to the overall efficiency of agriculture. Unless genuine sources of forestry and agricultural equipment financing exist, high efficiency and high productivity would remain fancy words devoid of real import.

On the other hand, landscape companies, although dealing with land and plants, require a completely different set of equipments. These companies need:

- Large mowing equipment
- Edging equipment
- Mulching equipment
- Turf maintenance equipment, irrigation system like sprinkler system, drip system and so
on.

Agricultural and Forestry enterprises may also need to invest in specialized equipments like automated milking machines, food processing equipment etc to come up with newer ways to boost productivity.

Agricultural and Forestry enterprises may also need to invest in specialized equipments like automated milking machines, food processing equipment etc to come up with newer ways to boost productivity.

How To Get The Best Deal?

When seeking agricultural and forestry equipment financing, do keep in mind the following points:

1. No one will lend money to you unless the lender is assured of your ability to repay. Hence, be prepared for filling forms, completing formalities and submitting documents.
2. Do not expect huge loans to be cleared overnight. These transactions do take a bit of time. Keep this in mind when making your plans. Do not forget to provide time to deal with loan related formalities and contingencies.
3. Make sure you fulfill the minimum qualifications to be entitled for a loan before you apply for the same.
4. Search around for the best deal. A loan that charges the lowest rate of interest will help you save a lot of money in the long run.
5. In your quest to get the best deal, do not end up dealing with fraudulent financing companies. Deal only with genuine financing companies.

Farm Equipment Financing

Farm equipment ranges from tractors, hay bailers to power tillers, harvesting equipments and so on. There is wide range of farm equipments a farm owner can choose from. But equipments useful in a dairy farm would not be useful in grain farm. Any type of farm equipment is really an investment and not an expense. Hence farm equipment financing is often called for.

Combine equipment is a type of equipment used in the field of agriculture in various jobs of harvesting, threshing and cleaning grains. It is time saving equipment and it can be used in for several types of crops like corn, soy, wheat and so on. The versatility and functionality adds to the cost and so many farm owners look for farm equipment financing to acquire it.

Hay bailers are used to compress grains in round or rectangular bales. They come in different configurations and are very useful in storing and transporting hay. However they are quite pricey and hay bailer financing is required by many farm owners to acquire these sophisticated equipments.

Stump grinder is useful farm equipment that grinds and removes stumps away. It comes in different sizes to treat different sizes of stumps. This equipment is highly useful in forestry and agricultural industries to remove stumps safely. Since it has heavy duty teeth and hydraulics, it is quite expensive. Farm equipment financing is the best option to acquire stump grinder.

Cotton bailers are useful in taking huge amounts of cotton and bailing them into bales in order to make them ready for storage or shipping. Though very expensive, they are extremely essential. Hence many farmers look for financing farm equipment to acquire cotton bailers.

Planting machine is highly useful in the agricultural farms to till the land automatically and to plant different types of seeds into the soil. It saves time and effort. It uses sophisticated techniques to plant seeds properly. Though expensive, many farms find it difficult to plant seeds without the help of this machine. Hence farm equipment financing is becoming essential nowadays.

Ploughing equipment is important farm equipment which helps to cultivate the soil automatically. This equipment is used by more number of farms to cultivate the soil for planting. Since it finishes the work quickly and efficiently, many farm owners find it essential to buy. Due to high price, it is often desirable to go for farm equipment financing to buy this equipment.

Tractors are the main farm equipment. They play a vital role in field of agriculture. They can also be used in towing jobs. Due to their versatility, they become indispensable in agriculture farm. They can be quite expensive and thus tractor financing is often required to acquire them.

Harvesting machine plays an important role in harvesting the crops which is the most time consuming task in the field of agriculture. The machine accomplishes the task quickly and efficiently. It can be used to harvest crops, vegetables or fruits. Thus, it is very essential for farm work. Due to its functionality, it carries a high price tag. But farm equipment financing makes it possible to acquire harvesting machine.

Some reliable financing companies are willing to provide farm equipment financing at low interest rates. Hence any farm owner can apply for the desired amount and can get fast approval.

Other Agricultural Equipment Financing

Agricultural equipment has become sophisticated and machine powered nowadays. They are vitally important for many agricultural activities. There is certain agricultural equipment like tractors, planting machine etc. Many banks and financial institutions are ready to finance for such agricultural equipment. Yet there is other agricultural equipment like food processing equipment, milking equipment etc which requires financing from some experienced equipment financing companies.

Other agricultural equipment financing is provided by certain legitimated financing companies in order to carry out some agricultural activities efficiently and quickly. Dairy machineries are important in today’s dairy farms. These machineries are modernized and improved to suit the demanding requirements. These machineries help in dairy farms where large numbers of milking animals are reared. Dairy farms find the dairy machineries easier to handle large volume of milk. Due to their functionality and sophisticated nature, they are quite pricey. Therefore many dairy farm owners look for other agricultural equipment financing to acquire them.

Milking machine plays a vital role in many dairy farms. It speeds up the milking process. The automated milking machine replaced the manual process which requires more time and effort. Hence it is indispensable in any dairy farm. It has great investment value and many farms wish to acquire this machine. However it is priced very high and so other agricultural equipment financing is the desired option.

Green house equipment is very essential to grow plants safely in an enclosed area where climatic conditions can not affect the growth of plants. They are highly sophisticated buildings and they come in different sizes and shapes. The equipment includes fans, mat, seed sheets, generators and UV paneling. Since these extra features add to the cost, other agricultural equipment financing is often desirable to acquire them.

Food processing equipment is also important form of other agricultural equipment. It takes the raw material and converts them into easier meals for human and livestock. It can be used to remove the dirt and any unwanted growths in the farm products. This equipment provides valuable service to city people who live far away from the farms by satisfying their food needs. The food processing equipment also helps in easy preparation and transportation of food products without spoiling. Since the equipment helps in multiple tasks, they can be expensive. Hence other agricultural equipment financing is desirable to acquire them.

There are some reliable financing companies that have experience in agricultural equipment can help farm owners by financing agricultural equipment at better interest rates. They accept online application forms and take immediate steps to provide fast approval. Hence the farm owners can acquire the desired amount to buy any of the agricultural equipment.

Many traditional financial institutions may not be ready to finance other agricultural equipment other than tractor and harvesting machinery. But there is some other agricultural equipment that provides invaluable service in the field of agriculture. Some reliable financing companies understand the need for such equipment and are willing to provide other agricultural equipment financing without any embarrassing procedures. Hence it is possible for any farm owner to acquire any agricultural equipment easily.

The Merits Of Used Farm Machinery

A common but mistaken perception with regards to used farm machinery is that they are those dilapidated and often unusable acquisitions. That’s why farmers tend to purchase brand new items that may cost twice as much when compared to used equipment.

But if that is the case, how else would you explain the rapid expansion of agricultural endeavors worldwide? Australia alone ranked as the 20th country in the world with regards to the number of tractors in 2003. That’s just tractors. The demand for these will definitely increase as the years go by.

Dispelling Incorrect Notions

The first incorrect notion about used farm machinery is that they are unserviceable and therefore unusable. If that’s the case, why else would anybody want to sell them? Although there’s a semblance of truth in that the workload and other environmental factors like constant exposure to sunlight, dust, water and earth may significantly affect the performance of these machines, the ones that are brought out in the pre-owned market are usually well-maintained. Furthermore, some of these used equipments are the ones that have been affected by the recent credit crunch.

Consider the economic conditions prior to the economic crisis of 2010. A farmer with substantial means was able to procure, let’s say, a farm tractor to increase his farm’s output. Now, when the economic crisis came, he was forced to let go of the tractor even though the balance was not fully paid. It’s highly likely that he wasn’t able to use the tractor for more than two seasons of farming. In such case, one can say that the farm tractor is still in prime condition.

Of course, not all situations are like that. But given the prohibitive nature of brand new farm equipment, it’s possible that such scenarios are pretty common in the post recession agricultural economy.

second-hand Farm Machinery are Expensive

That’s the second incorrect notion. Like automobiles and other mechanical equipment, their value depreciates on a regular basis. This principle is often used in standard accounting procedures and reflects the nature of farm machines as mechanical objects.

As time passes by, equipment can only get cheaper and cheaper.

No Financing is Available

The last incorrect notion that must be corrected is that there is no financing available for used farm machinery. On the contrary, notable companies such as John Deere or second-hand farm machinery, provide flexible financing options to farmers. Aside from that, many financial institutions realize the potential of agriculture in a world that’s increasingly becoming interconnected. It believes in investing in farmers in order to increase food production.

In fact, several financing options are made available even online. This lets you choose which solution fits you best. Three financing options are available when it comes to John Deere, and they all take account of the difference in requirements for each and every businessman. Among the options available are Direct Pay-Recurring, Direct Pay-One Time and Pay by Mail. The wide choices available are custom-made for the requirements of the cost conscious agricultural entrepreneur.

How Equipment Leasing Began

Although no one knows when equipment leasing first began, archeological evidence suggests it has been around for at least four millennia. The evidence also closely ties equipment leasing’s origin to early agricultural development. Archeologists uncovered some of the first tangible signs of personal property leasing in the ruins of Ur, an ancient Sumerian city (in ancient Iraq). Clay tablets discovered by archeologists indicate that around 2000 B.C., Sumerian priests leased farm implements, land, water rights, and livestock to farmers.

Apparently, leasing was also used by the Babylonians in the fertile valley between the Tigris and Euphrates rivers. Ancient Babylonian kingdoms authorized farmers to lease farm equipment, oxen and land. Archeological finds reveal the importance of leasing to the most prominent Babylonian king, Hammurabi, who codified leasing regulations during his rule (around 1750 B.C.).

Around 450 B.C., just south of Babylon, the wealthy Murashu family started a bank and leasing house that helped Persian farmers acquire land and farm equipment. Their firm became one of the best known financial services providers to Persian farmers and land holders at the time.

In other ancient civilizations, leasing proved viable for acquiring the tools, land, and livestock to support agricultural pursuits. There are indications that the ancient Egyptians, Greeks, and Romans employed leasing for this purpose.

In addition to its role in advancing agriculture during ancient times, leasing played a significant role in sea transportation and military endeavors. The ancient Phoenicians, known for their prowess and expertise in shipping and trade, employed ship charters that bear close resemblance to the modern lease. Many short-term charters that conveyed the use of ships and their crews resembled the operating leases used today. Some long-term charters were written for periods covering the estimated economic life of the vessels. These contracts often conveyed the use, benefits, and obligations associated with ship ownership. In many cases, these arrangements presented some of the same negotiating issues that face modern day lessees and lease providers.

Several important military campaigns illustrate the early military uses of equipment leasing. For example, the Norwegians and Normans used forms of lease financing to secure the ships, equipment and crews necessary to launched their invasion of England in 1066 A.D. During a later period, knights leased their armor for battle. In 1248, Bonfils Manganella of Gaeta leased a suit of armor used during the Seventh Crusade, paying a rental that was close to 25% of the armor’s original value.

For centuries, personal property leasing was not recognized in England under their common law. As a result of the rising popularity of equipment leasing, personal property leasing regulations were included in the Statute of Wales of 1284. Over time, a few Englishmen began to use leasing as a means to secretly acquire property — with the intent of defrauding creditors. At the time, many creditors based their credit decisions on the value of property in the borrowers’ possession. In 1571, England passed an act that prohibited such fraudulent property transfers while preserving the ability to use leasing for legitimate purposes and for reasonable consideration.

By the early 1800s, both the amount and variety of equipment being leased in the United Kingdom had increased. The expansion of agriculture, manufacturing and transportation led to more widespread use of this form of financing. In particular, the expansion of railroads accelerated equipment leasing’s growth. Many early railroad companies struggled financially to construct their tracks, relying on tolls for track use to generate income. This development presented an opportunity for enterprising entrepreneurs to separately acquire and lease railcars to the rail companies and independent shippers.

Equipment leasing continued to play an important role in England and other parts of Europe as the agricultural, manufacturing and transportation industries expanded. It also began to take root in the U.S. as these same industries grew. Although the first equipment leasing transactions in the U.S. involved horses, buggies, and wagons, leasing also gained popularity with the expansion of U.S. railroads. As the rail companies expanded and equipment leasing began to branch out into the manufacturing segments, the U.S. started its transition into the modern era of leasing.

George Parker is a twenty-five year industry leader, co-founder and Executive Vice President of Leasing Technologies International, Inc. (“LTI”). He is author of several articles and e-books, including “Using Venture Leasing As A Competitive Weapon” and “101 Equipment Leasing Tips”.