Farm equipment financing with seasonal and annual payments

Few businesses are as seasonal as farming. Seed, fertilizer, fuel and labor are paid in spring; most revenue arrives after harvest, sometimes months later if grain is stored for a better price. Monthly payments that ignore that rhythm strain cash flow when it is tightest.

Payment structures for ag

• Annual payments due after harvest
• Semi-annual payments matched to two cropping seasons or livestock sales
• Skip payments in planting months
• Deferred first payment for equipment bought before the season

What gets financed

Tractors, combines and harvesters, planters and seeders, sprayers, tillage implements, and grain handling and storage. New and used equipment from dealers, auctions and other farmers can be financed. Precision-ag technology, such as guidance systems and yield monitors, can often be included with the equipment.

What lenders look at

Ag lenders look at the operation as a whole: acres farmed and owned versus rented, crop mix, years farming, and cash flow over several seasons, not just the last one. Schedule F or farm financial statements are typical for larger requests, along with a list of equipment already financed.

Used equipment and auctions

Much farm equipment changes hands at auction or between neighbors. Lenders finance these purchases too, with a bill of sale, serial numbers and confirmation that the seller owns the equipment free of liens. Get financing lined up before auction day so you can bid with confidence.

Tax timing

Farm machinery generally qualifies for Section 179 and bonus depreciation. Buying late in the year can reduce taxes on a strong crop year, provided the equipment is placed in service by December 31. Talk to your tax advisor about how this fits with income averaging, prepaid expenses and other farm tax rules.

Working capital for the season

Operating costs before harvest are a classic working capital need. Some farms use an operating line from their bank; others pair equipment financing with a short-term working capital note. Either way, plan it with your equipment purchases so payments don’t stack up in the same months.

LenderCloud finances agricultural equipment with annual, semi-annual and seasonal structures on approved deals. All financing is subject to credit approval.