Are you looking for a loan for the tractor? Are you a farmer and want to repair or replace the tractor as an implement? Or are you a fan of old tractors and want to buy a museum piece or rebuild it yourself?
We present current financing options for agricultural machinery below. Find out what’s important, what difficulties might be lurking and how to overcome them.
Credit for the tractor – full-time agriculture
A cheap credit for the tractor is existential for full-time farmers. The modern, reliable, energy-saving tractor is the centerpiece of its business model. Farmers use their tractors as implement carriers for all types of attachments. At least the “big” tractor of the agricultural enterprise is used all year round. If this machine fails, no farmer can keep to his tight schedule.
It is nature that sets the farmer’s “timetable”. Even a week of failure of the central machine at the “wrong moment” can endanger the income of an entire year. Against this background, large farmers replace their main tractor and heavy-duty attachments every five years. Investment amounts beyond 100,000 USD to buy the new machine are part of everyday life when buying a tractor.
The creditworthiness of receiving such a high credit for the tractor is given to farmers from their gigantic land holdings. Full-time agriculture is only worthwhile for farm sizes larger than 150 hectares of own land. It is not uncommon for the farmed areas behind the farms to be between 500 and 1000 hectares of arable land and forest. The risk of lending is almost zero for credit institutions, and there is a wide range of options to choose from.
Offers to finance an agricultural machine
The first financing offer, just like buying a car, usually comes from the agricultural machinery dealer. The farmer can only very rarely expect interest-free financing in this way. The loan from the agricultural machinery dealer has proven to be particularly advantageous for farmers who work with a lot of leased land. Leasehold is not property. For a regular bank loan, it does not increase the credit rating.
But the specialist providers behind the agricultural machinery dealers still rate the leased land as proof of a secure income. Another advantage of this type of financing is the relatively quick loan approval to the agricultural machinery dealer. In addition, a personal experience from the family. In the event of a crop failure, a close relative, leaseholder on the side, faced the problem of financing a well-used tractor.
He received the preliminary loan approval for his tractor loan in about 30 minutes. Two hours later he was already back in the harvest with the replacement machine (field test with dealer registration number). His down payment consisted of the old tractor in need of repair and the promise – after the harvest – to increase the down payment. The example may not be generally binding. But it shows how easy it can be to finance a tractor quickly in an emergency.
Public promotional loan for the tractor
A much cheaper alternative would be the Savings bank entrepreneur loan (037). Full-time farmers are entrepreneurs and, just like an industrial company, receive government subsidies for investment projects. Savings bank offers the promotional loan from an effective annual interest rate of 1.0 percent. Up to 25 million USD are likely to be raised for the purchase of equipment and other operational investments.
Compared to such a high maximum loan amount, 100,000 USD of credit seem rather small for the tractor. Savings bank assumes 50 percent of the credit protection. The necessary proof of creditworthiness, with Savings bank’s partner bank, is relatively easy to provide. The minimum term for the publicly subsidized loan to buy agricultural machinery is 24 months. It is therefore clearly below the usual interval for machine replacement.
Tractor credit for hobby tractor operators
People discover old tractors as a hobby. People who have farming in their blood dream of a real Mr. Ver, “just for fun”. Of course, only a few people can fulfill their dream of living from agriculture. But such a small yard tractor fits in every garage. The prices are a matter of negotiation. Tractors from the 1960s start at around $ 1500 purchase price.
For about 5000 USD there are already old farm tractors that are still fully functional and can easily be approved for road use. The right loan for the tractor, for a nostalgia project, is ultra-modern. Free loan comparisons of regular installment loans from the Internet lead to the lowest interest financing. A small loan for the purchase of a tractor or for the necessary restoration of the agricultural machine may be interesting for most people.
Small loans are considered to be particularly low-interest if a credit line between USD 1,000 and USD 3,000 with a maximum term of 36 months is sufficient. Loan offers range around 2 percent APR. If an advertising offer is used, for example the exclusive deal from Best Lender, the effective interest would be even cheaper. Currently, 0.99 percent APR could be available for the tractor.
Our tip for amateur tractors:
The credit brokerage portal Best Lender offers loans in all acceptable credit ratings. The portal integrates both the loan offers from regular banks, special providers and private loans. In line with personal creditworthiness, a low-interest loan for the tractor can almost always be discovered via Best Lender. With a sufficiently good credit rating from a bank, with a noticeable weakness in credit rating from private. In both cases, the KfZ letter can be used as a means of securing credit.