You’ve read, perhaps talked to neighbors, or maybe you’ve learned first hand that many tools of precision agriculture pay for themselves—maybe in one year, maybe three. But perhaps you’re thinking you can’t swing that $5,000 or $15,000 payment right now in order to start saving input costs with this technology.
To that end, some companies are making it simple and easy to lease equipment. Yesterday I spoke with Troy Jaros with Lease Consultants, Des Moines, Ia., to learn why some growers are leasing precision technology. “Basically, some growers value this type of payment option over time because it fits with how they recoup benefits from the equipment over time. And they can make a larger investment in multiple technologies that can multiply their input cost savings.”
Jaros, who handles all leasing for Ag Leader Technology, says the leasing option has truly helped operations move forward more quickly with technology adoption. “For example, one grower was going to add precision technology to two pieces of equipment because that’s what his cash budget allowed. But once the dealer offered the leasing option in annual payments over time, he decided he could afford to equip his sprayer and anhydrous rig, too. It allowed the customer to do his entire project in one year,” he says.
Jaros says they get very positive feedback from Ag Leader customers who cite simplicity and ease of approval as key selling points. “We have a simple two-page lease form, we offer quick approval, we don’t force our own insurance on customers, we give a 6% prepayment discount instead of early prepayment penalty, customers can choose their buyout amount, and we will finance 100% without down payment.”
For growers thinking about leasing, Jaros offers these benefits to consider:
• Leasing improves your cash flow. “New equipment either saves money on current expenses or increases income. Either way a lease allows the equipment to earn its keep as payments are made.”
• It preserves your bank or primary lender credit line. “As bankers have tightened their credit door, some growers opt to save their bank for, say, land purchases and taxes—not equipment.”
• Payment plans may overcome budgetary restrictions. “Particularly in large farming corporations, a manager may have authority to obligate for operating expenses, but they may be unable to approve capital expenditures”.
• Keep equipment up to date. “Upgrade to most current equipment as needs change or technology improves.”
• It simplifies accounting. You don’t have depreciation schedules.
• “We provide 100% financing. No need to put 10% down, and the customer determines when payments start.”
If you want to explore this option for your operation, you can start by contacting your local Ag Leader dealer.