Farmers Use Capital Asset Leasing to Strategically

Protect Profit Margins

The agricultural marketplace has experienced rampant transitions and upheaval in recent years. Changes in food trends and growing populations have always had an impact on the success of U.S. farmers. However, today’s growers face a wide range of other threats to their operations. The rapid increase in severe weather events has not only influenced their bounty but has also played a vital role in the overall loss of viable farmlands across the country. 

Of course, Mother Nature isn’t the only factor obstructing harvest and profit margins for farmers. Tariff wars, most notably with China, are also hindering the financial viability of some of our major crops. China is one of the biggest buyers of several U.S. agricultural products, including cotton, grain sorghum, cattle hides, and soybeans (aka our country’s top food export), making American yields a primary target for retaliation tariffs after the trade war launched in 2018.  

American Farmers Strive to Run Lean Operations and Preserve Cash Flow 

Many U.S. farmers, striving to adapt to the latest shifts in the marketplace, are prioritizing lean operations that protect profit margins and preserve capital resources. One of the biggest drains on both farming revenues and internal cash flow? Capital equipment. 

Unfortunately, effective (read: expensive) machines and innovation are essential to a farmer’s success. Even smaller farms require access to a diverse range of equipment, including tractors, harvesters, and tillers to maintain and grow their operations. As a result, many agriculturalists in need of new machinery and technology are opting to lease their equipment instead of purchasing these items through banks or other traditional lending options. 

Is financing farming assets the right move for your agronomic business? Knowing the advantages of leasing can help you make the best decision for your operations. Leasing agricultural machinery offers growers and ranchers several invaluable benefits, such as: 

Immediate Equipment Utilization

The agricultural industry, compared to other verticals, is exceptionally time (and season) sensitive and the revenues on any given crop cycle represent a finite cash reserve. Even a single missed day in the field can have dire consequences. Leasing capital equipment eliminates the potentially looming threat of breakdowns or service lapses. Unlike traditional bank loans that often require a lengthy approval process, dynamic leasing companies can expedite an application, giving farmers access to the equipment that they need when they need it.   

Pinpoint the Right Equipment

Finding the right machinery or technology for a specific farming task can often prove more challenging than initially expected. Purchasing the equipment outright means that once you receive delivery on an item, it’s yours, whether it gets the job done properly or not. Leasing grants agriculturalists a little more wiggle room, allowing farms to test out the equipment first to determine if an item is a good fit for a specific task. 

Short-Term Leases Based On Use

Many farmers base their crop cycles on seasonal weather patterns and only need to use certain pieces of equipment during specific times of the year. Leasing seasonal machinery can prove a more financially efficient option compared to purchasing and maintaining machines that won’t be used during various months or seasons. 

Keep Pace With Cutting-Edge Technology

Like most industries, farming technology has progressed at an accelerated rate in recent years. While rapidly evolving innovation has its advantages, it does have its downside. Many U.S. farmers find that purchased products quickly become obsolete, often losing its relevance in just a few short years. For farmers worried about outdated technology, capital asset leasing often proves the right decision. A short-term lease enables farms to utilize what’s considered cutting edge today as well as provide the flexibility to upgrade items as needed and maintain their competitive lead. Easy upgrades offered through leasing not only allow farmers to eliminate potential performance gaps in their fields, but it also provides workers firsthand experience with some of the industry’s latest advancements. 

Lower Monthly Payments

Most importantly, purchasing an item outright requires relinquishing complete payment for the product or potentially managing a potentially fluctuating loan note. However, leasing capital assets means farmers have one consistent monthly payment they can plan for while protecting their cash reserves. Put simply, leasing enables farmers to free up capital resources to be used on other projects and initiatives needed to help them grow their operations and stay healthy in a turbulent vertical. 

 

Looking to sustain or grow your farm with a capital asset lease? AvTech Capital can help. Contact us today to hear about our dynamic portfolio of financing options. 

AvTech Capital Aids in Restaurant Opening

Restaurant Furnishings: When a new restaurant needed a variety of leasehold improvements to furnish its space and make it functional for opening day, it looked to Avtech Capital for help. Avtech assessed the customer’s needs and provided equipment lease financing to...

$57,243 Leased to Commercial Truck Retailer

Machinery Financing: Announcing a $57,243 equipment finance transaction for a company that sells new and used commercial trucks. Located in the southern United States, the company also offers replacement parts and accessories and provides vehicle servicing. Through...

Company Obtains IT Equipment through $158k Lease

Hardware Financing: AvTech Capital was pleased to assist this Mid-Atlantic limited liability company with a $158K equipment lease. The company operates or franchises hundreds of travel centers, standalone restaurants, and truck service facilities. As part of their...

AvTech Capital Finances Laser Device for Manufacturer

Technology Lease: AvTech Capital is pleased to announce a $151,415 commercial finance transaction for a manufacturer of composite parts and tooling. The company designs, develops, and manufactures production parts and tooling, primarily for the aerospace and...

$106,069 Lease for Auto Parts Company

Renovation Lease: Announcing the closing of a commercial equipment lease for an auto parts company. Operating in the Northeastern United States, the company stocks a wide variety of auto parts for both domestic and foreign vehicles. The company will lease $106,069 in...

$330,253 Leased to Wind Energy Company

Vehicle & Tool Financing: AvTech Capital is pleased to announce a $330,253 equipment lease for a company in the wind industry. Located throughout North America and the South Pacific, the company provides project management, maintenance, and staffing services for...

$5M Technology Lease for Electronics Manufacturer

Funding for New Machinery: Announcing a $5,052,835 equipment lease for a company specializing in precision plastic molding. The company manufactures parts for a wide variety of industries, including the computer, telecommunications, industrial, and medical industries....

AvTech Capital Provides $3.6M Lease to Manufacturer

Machinery Financing: AvTech Capital is pleased to announce a $3,603,518 equipment lease for a manufacturer. The company creates moulded plastic components which are used in medical and electronic products. Equipment for the transaction consists of a CNC machine,...

Healthcare Company Leases $956K in Dental Lasers

Medical Equipment Financing: Announcing the closing of a dental machinery lease for a healthcare company in the western United States. The company provides a variety of services including primary and preventive visits, dental care, mental health services, and case...

$460,000 in Funds for Printing Equipment

Machinery Lease: Announcing an equipment finance transaction for a company that provides printing and distribution services. Through an equipment lease, the company will acquire new inserting and drying equipment. This equipment will give the company the in-house...