This article from Canyonmoor Lending Group in Montrose, Colorado compares ways to finance farm and ranch equipment: equipment loans, leases, dealer and manufacturer programs, annual payment schedules and farm lines of credit, with invented worked figures for a tractor and a used implement. It gives no farm counts, because the Census business data used on this site leaves out crop and animal production.
The Direct Answer on Financing Farm Equipment
The method that costs the least for one operation can cost the most for another. A machine kept for fifteen years suits a loan, because the operator owns it when the payments end. A machine replaced every few years suits a lease. A dealer or manufacturer program can carry a promotional rate on new equipment, but may require buying from that dealer at its price. And an annual or semiannual payment schedule, offered by some agricultural funders, can match payments to when the operation is paid.
Compare every offer in total dollars over the same years: payments, fees, any buyout and the value left in the machine. The equipment page covers loans and leases in general, and the sections below apply them to ranch machinery.
Farm Equipment in the Montrose County, CO Business Counts
County Business Patterns, the Census source for employer counts on this site, leaves out crop and animal production, so it gives no count of farms or ranches and none is quoted here. It does count businesses that support agriculture and forestry, such as custom operators and farm management services: 10 employer establishments in Montrose County, CO in 2023, all with fewer than five employees (County Business Patterns 2023). Nonemployer Statistics counted 74 such businesses without paid employees for 2024 (Nonemployer Statistics 2024).
Commercial and industrial machinery repair counted 5 employer establishments in the county (County Business Patterns 2023); the shops that keep machinery running finance their own service trucks and tools too.
How to Finance Farm Equipment With a Monthly Equipment Loan
Illustration only, invented figures: an operator buys a $118,000 tractor with a loader, puts $23,600 down and finances $94,400 over 84 months at an invented annual rate of 9%. The payment is about $1,519 a month and the total interest about $33,180 (our arithmetic). The tractor secures the loan, and the lien is released with the last payment.
Monthly payments suit an operation with income spread across the year, such as custom work billed monthly or a ranch selling to several buyers. An operation paid once or twice a year may find a monthly schedule strains its cash between sales.
How Does Farm Financing Work With Annual Payments?
Some agricultural funders offer annual or semiannual payments timed to when the operation is paid. Illustration only, invented figures: the same $94,400 over 7 annual payments at an invented 9% comes to about $18,756 a year, about $36,895 in interest over the term (our arithmetic). Interest runs on the full balance for a whole year before the first payment, so annual schedules can cost more in total; set the totals side by side.
Ask each funder which schedules it offers and how a late sale affects a payment date. An annual payment that falls before the income arrives defeats the purpose.
Leasing Ranch Machinery or Buying It Outright
Illustration only, invented figures: a lease of the same tractor at $1,450 a month for 60 months with a $38,000 buyout totals $125,000 if the operator buys it at the end (our arithmetic). The lease keeps monthly costs lower in the early years and lets the operator hand the machine back; buying it out at the end can cost more than a loan would have.
A lease fits machines replaced on a cycle, or an operator unsure how long a machine will be needed. A loan fits machines kept for their whole working life. Ask a tax preparer how each is treated.
Used Implements and Older Machines
Used equipment costs less up front but draws shorter terms, because it has less working life left to secure the loan. Illustration only, invented figures: a $46,000 used baler financed over 48 months at an invented annual rate of 10% costs about $1,167 a month (our arithmetic). A dealer inspection, service records and the hour meter all help a partner value an older machine.
The article on skid steer terms explains how age and hours shape the term on any used machine.
Farm Line of Credit for Fuel, Parts and Repairs
Equipment loans pay for machines; a revolving line pays for what keeps them running between sales: fuel, parts, repairs, custom hire. Draw when the bill is due and pay down when income arrives. The line of credit page explains draws, renewals and clean-up periods, and a line sized to a year's operating costs, not the price of a machine, keeps fees in proportion.
- Keep the machine loan and the operating line separate, so each has its own schedule.
- Do not use the line for a machine; a balance that never falls belongs on a term loan.
- Check the line's renewal date against when income arrives.
How to Finance a Ranch Business Expansion Without Buying Land
Buying land is real estate lending and falls outside this site. Expanding the business on land already owned or leased, with more machinery, a shop building's equipment or a second trailer, fits equipment financing or a term loan. List each item with its quote, so each can be priced on its own term.
- Get written quotes with model, year, hours and serial number.
- Decide loan or lease for each item.
- Match each term to the machine's working life.
- Choose monthly or annual payments to match when income arrives.
- Phone (970) 238-5206 or send the web form with the list and the total.
By Canyonmoor Lending Group · Updated
