Financial Diversification
In the past, most farmers and businesses have used the local banks for all their financial needs; however, bank mergers and acquisitions have forever changed bank personalities and operational procedures. Today, many financial needs can well exceed the lending limits of their area banks. For maximum flexibility, we suggest that you consider the local bank for operating funds and AgPro Financial Service, LLC, for equipment purchases. Experience has shown the danger of over dependence on a single source of financing. In addition to this you will probably find our rates will beat your local bank interest rates.

Equipment Lease versus a Loan
Financing equipment with a local bank may reduce your borrowing power for operating money and create more liens on your property. A loan also requires that you show the loan amount as debt on your financial statement, thus having a negative impact on your financial ratios. A lease is a rent to own contract. You are not taking on more debt, you are renting equipment with the right to buy it at the end of the lease. Usually the buyout is either $1.00 or 20% of the amount leased.

Bonus Deprecation
Bonus depreciation can be great for maximum depreciation deduction; however, depreciation lowers your income by that same amount. Be careful that depreciation does not lower your income to the point that lenders are concerned with your ability to repay. Bonus depreciation only applies to new equipment. For used equipment, call us to discuss options that will yield similar results. (AgPro Financial Service, LLC can also make loans on equipment if you need the bonus depreciation)

No Pre Payment or Payoff Penalities
Just about all of the leases we write DO NOT have any pre payment or payoff penalities. What this means to you is that if two years into the lease you want to trade the equipment off, you simply payoff the remaining balance of the lease. This is the same thing as a simple interest loan.

Bargain With Cash
Most major equipment manufacturers offer some kind of lease or loan. Notice the relationship between their promoted low rates and the increase in the price of their equipment. When you work with AgPro Financial Service, LLC, you are bargaining with cash. Our rates are very competitive with local area banks.

Preserve Credit Lines
Leasing permits acquisition of equipment now and preserves bank credit lines for other opportunities. This tends to expand your available lines of credit for future growth.

Tax Advantage
Lease terms are usually shorter than the depreciable life of the equipment and lease payments can be treated as equipment rental expense-- resulting in a faster write-off of equipment and tax savings.

Better Cash Flow
Lease payments can provide improved cash flow when compared to loan payments or cash purchases. The first lease payment is usually less than a loan down payment and sales tax is collected over the life of the lease, not paid in advance. In real dollars, lease payments actually decrease over time due to inflation.

Payment Flexibility
Lease payments can be structured to match equipment use and cash flow needs. Payments can be structured as monthly, quarterly, semi-anually, or annually. Skipped payments and step up payments are also available.

End of Lease Options
At the end of the lease rental period, you may purchase the equipment or continue to make rental payments, or return the equipment.

Easier Approval
Often corporate branch operations, hospitals, non-profit organizations and municipalities are able to acquire equipment through a lease arrangement without board or home office approval for a capital expenditure. Lease payments are treated as rental expense and no capital outlay is required.

Upgrade Equipment
In some instances, the equipment needs to be upgraded prior to the end of the lease term. In this case, you can arrange with your equipment dealer to trade in the leased equipment and re-lease the new equipment. The lessee also has the option of buying out the lease at any time.

Balance Sheet Ratios
Leasing allows you to acquire needed equipment without taking on more debt. Adding debt often affects your operating line borrowing rate.

Fixed Payments
Once approved, the terms and payments are guaranteed. Even though interest rates may rise, lease payments will remain the same.

Flexible Payment Plans
We offer annual, semi-annual, quarterly, or farm/seasonal payment options that are designed to fit your cash flow needs. Regardless of changes in the market, your payments will stay the same during the term of the lease.

Leasing Frees Your Cash
The down payment money, or the value of your trade-in, can be made available for other investment purposes.

Lease With An Option To Buy
If you feel that you may want to purchase the equipment when the lease expires, you can stipulate that option at lease inception. Your purchase price will be set at the time you lease. However, if you later decide you do not want to purchase the equipment at lease end, you may return the equipment.