Today’s operations require a significant investment in machinery and equipment. Leasing is a viable way for producers to conserve capital and leverage advances in technology at the same time. Premier Farm Credit offers leases on a wide variety of items, such as bins, sprinklers, equipment, buildings, vehicles, etc.
Here are some possible advantages to leasing:
• Pay Nothing Down – Typically, down payments aren’t necessary – just the first payment is due when the lease begins. Often, leasing can provide 100% financing.
• Maximize Tax Benefits – Lease payments may be fully tax deductible under a True Lease, lowering taxable income and allowing faster expensing of equipment compared to traditional depreciation. A Conditional Sale Lease allows the lessee to take advantage of deductions available as tax owner of the equipment.
• Control Cash Flow – Fixed rates and flexible payment schedules allow us to match payments to cash flow and the profits generated by the leased equipment.
• Preserve Capital – By leasing, you can preserve cash, working capital and other credit lines for expansions and day-to-day expenses.
• Standardize Replacement Cycle – A planned replacement cycle ensures access to reliable, low maintenance equipment at all times.
• Retain Future Flexibility – When the lease ends, the lessee can purchase and continue using the equipment or return it and get a newer model.
• Estate Planning Tool – Use leasing as a simple way to transition equipment to the next generation at the end of the lease term.
Please note: You should consult with your accounting, tax, or legal advisor to choose the right type of lease for your situation.