How to Choose the Right Tractor Finance Option for Your Farm
When investing in a tractor, securing the right finance is just as important as selecting the machine itself. The choice you make will impact cash-flow, tax treatment and your operational flexibility.
1. Common Finance Structures for Tractors
Chattel Mortgage
A chattel mortgage means you own the asset from the outset and the lender holds a mortgage over it. It’s often used when ownership is the goal.
Lease / Equipment Hire
Leasing (or equipment hire) provides use of the asset without full ownership. For short-term usage, or when you expect technology to change, this can be attractive.
Asset Finance / Equipment Loan
An equipment loan is like standard debt where you borrow to pay the tractor and repay over time. Many lenders emphasise this for new and used tractors.
2. Factors to Consider When Choosing Finance
- Cash-flow seasonality
- Machine life and upgrade plans
- Tax and depreciation implications
- Use of an experienced agricultural lender
3. Steps to Make the Right Decision
- Get quotes on your chosen tractor.
- Estimate repayment capacity by season.
- Compare lender options and terms.
- Discuss depreciation and GST with your accountant.
4. Why Use a Specialist Over a General Bank?
Specialist brokers often deliver better rates and tailored repayment terms that align with farming cycles.
5. Getting Started with TractorFinancer
At TractorFinancer, we specialise in helping Australian farmers access the right finance for tractors. Start by getting a quote now via BK Brokers and structure a finance plan that suits your business.