Established farmers and agricultural land owners often have entire barns full of high-end specialty farming equipment sitting around waiting for the season to start. This kind of equity can be put to good use when you need to make upgrades or repairs to your business. Borrowing with farm equipment loans is a good way to qualify for lower interest rates, reducing what you spend in the long run on much needed improvements. There are many benefits to these kinds of loans that allow you to put that farm equipment to good use.
How Collateral Works For Private Farm Equipment Loans
The components of asset-based farm loans are quite simple:
- Valuable equipment, such as tractors, combines, and harvesters, are used as collateral for a loan
- The borrower keeps the equipment while repaying the loan, and doesn’t have to do anything else once it is repaid
- The lender gets the equipment agreed upon during the borrowing stage if the borrower ends up unable to pay back the loan
These loans are easier to get if you are new to borrowing large amounts for business or personal purposes. Using a tangible item with a fixed value as a guarantee on your intent to pay reduces the risk taken by the lender, making them more amendable to handing over the cash you need. These loans tend to process quickly and get you the money needed without a long wait for a decision. With lower interest rates and more flexible options from the lender, you don’t need to spend years building up your credit score just to get started on a project you have in mind.
Keep in mind that all farm equipment used for loans must be owned in full and not under a lien. The tractor that you are still making payments on doesn’t qualify as collateral just yet.
Get your loan now after you call in to discover what your farm equipment might be worth. Talk with our expert team for more information immediately.
If you’re interested in financing new farm equipment, use this form instead.