With around 136,000 farms being owned by graziers and farmers in Australia, 61% of the total landmass of the country is dedicated to farming. Nearly 64% of the Australian farms are owned by the state, and 23% belong to the indigenous tribes and groups. However, to increase productivity and to make food accessible to millions of dining tables, farms need the right farm equipment at the best time at the best price. Many of this equipment come with a heavy price tag, and so you might need farm equipment finance assistance.
Here are some of the best practices that you do to get the right Equipment Financing:
Do Your Research: First of all, it is important to research the type of farm equipment you wish to buy. It should not only suit the business plan of your farm but also not exceed your budget. While considering the costs, do not forget to include the gas, electricity, maintenance, and other charges you have to pay for it.
Know Your Options of Procurement: Certain lenders who provide farm equipment finance impose limitations on which manufacturers or vendors you can choose. It’s in your best interest to stay away from such lenders. The lender should make money available to you, and at the same time, give you the freedom to select your own vendor as per your wish. This will allow you to choose the equipment you want to own and even negotiate accordingly.
Try to Opt for Slow Times: If your business is running slow, then rest assured that vendors selling farm equipment would be tightening the belts. During such times, instead of keeping a halt on your investment plans, take them as ideal times to move in the right direction. This can be the right time to negotiate a deal and purchase the equipment you require to boost your farm’s profitability, capacity, and productivity.
Go for an Affordable Loan Duration for Repayment: While the total price of taking farm equipment finance is majorly based on the rate of interest, the monthly amount of installment you have to pay depends on the duration of the loan. It is critical to go for a loan that has the shortest duration of time, as it will allow you to make easy payments in time. If you increase the duration of the loan, you will keep paying the installments for a longer duration of time, as a result of which you may end up raising your financing budget.
Augment Loan with Business Line of Credit: A business line of credit that keeps revolving is much similar to a credit card, in which you have to pay interest only on the amount you borrow. In a revolving line of credit, the repaid fund is made available to you time and again. Such farm equipment finance can meet your short-term expenses that may arise all of a sudden.
Decide Between Replace vs Repair: For any person, a single penny saved is equal to a single penny earned. However, there may be times when getting your farm equipment repaired does not sound like a financial benefit, especially when the equipment is too old and is no longer effective, productive, and efficient. Old equipment is often not able to keep at par with the modern versions, due to which it makes sense to invest in a new set of equipment. For this, farm equipment finance can prove to be of great help.
There are many service providers out there who can support you with financing for equipment in the farming sector. Get in touch with them and let them suggest you the best possible farm equipment finance options depending on your individual condition.