Farm equipment leasing and purchase options

Examine what happens when the lease ends

An agricultural equipment lease pays for access to a machine under a contract rather than automatically transferring ownership at the outset. The agreement may provide a purchase option, a return requirement or another end-of-term arrangement, each with a different financial effect. Farm Credit East offers agricultural equipment and facility leasing, and Farm Credit Mid-America includes leases in its lending range. Request the full payment schedule and the written residual-value or purchase provisions before comparing the proposal with a conventional equipment loan.

Compare the complete cost of using the equipment

A useful comparison includes the initial payment, all rents, maintenance, insurance, any usage limits and the amount needed to keep the machine. Ask who bears transport and refurbishment costs if it is returned, and what happens if it becomes unsuitable before the lease expires. Tax treatment follows the actual contractual and ownership position, so a lease should not be selected on an assumed deduction alone. Match the agreement to the farm’s expected machine use and plans for replacing or retaining the equipment.