Farm Credit Services Leases

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Leases

Leases can be structured for virtually any farm vehicle, equipment, machinery and facilities – new or used – including trucks, machine sheds, grain bins, irrigation systems, combines, tractors, livestock buildings and other farm equipment. Because there is no required down payment, a lease can reduce your initial cash outlay, freeing up working capital to be used elsewhere. Lease payments and purchase options are generally fixed and known in advance, providing cash flow management opportunities and peace of mind.

Tax Advantages

While lower up-front cash outflow is definitely a benefit, one of the most-talked about reasons for leasing farm equipment or structures is the tax advantage. Since payments on true tax leases are 100 percent tax deductible, a lease is a good option if you need to reduce your tax liabilities. Because you are able to deduct your lease payments, leasing in many cases can reduce your tax liability by permitting a faster write off of expenses than can be achieved through depreciation.

Special Pickup Leasing Program

We also offer a very attractive pickup truck and sport utility truck leasing program available to farmers only through Farm Credit Services. We utilize a national fleet volume discount to provide you with the lowest available acquisition cost for these types of vehicles. In addition to leasing’s tax benefits, there are other program advantages – like no mileage or wear and tear charges, and the ability to custom-order your vehicle just the way you want it.

Section 179

Leasing can be particularly valuable if you have used all the annual Section 179 deduction for the year – or for acquisitions in the last quarter of the year – and want to manage the Internal Revenue Service’s mid-quarter convention restrictions. You should check with your tax consultant to determine how these provisions may apply to your operation.

Manufacturer Financing Ending?

If you received a manufacturer’s special introductory financing on your tractor, combine or other equipment, contact your local Farm Credit Services financial professional before those terms expire and higher rates begin. A Farm Credit Services lease may help extend your savings beyond the introductory period.

Leases For Estate Planning

Leasing also can be a good tool for estate planning. With a lease, a producer who is looking at retiring in the near future can pass on a piece of equipment or facility to whoever is taking over the farm without any implications to the retiree’s estate. At the end of the lease, the lessee assigns the purchase option to the new farm operator whom, with the lessor’s approval, can purchase the equipment or facility or return the item and get something more suitable for his or her needs.

Terms

Our leases offer longer repayment periods for your larger capital purchases. Leases are available for:

Up to seven years for new machinery
Up to 10 years for some buildings and certain farm improvements

Choose from annual, semi-annual, or monthly payment schedules. In short, these leases are tailored to the useful life of the item being financed so you’re not paying for an asset that is physically depreciated.

Loans

We also can provide loans on machinery, equipment and structures.

Life & Disability Insurance Protection

	As an additional service to our clients, we can provide you with cost-effective group life and disability insurance coverage for your lease. Get the peace of mind that comes with knowing that if something happens to you, your family and farm operation are protected from a major expense and an uncertain future.