Lease Financing

Lease Financing is a financial tool used to acquire assets for your farming operation that enables you to conserve cash and manage your income tax liability. A properly structured lease may significantly reduce your income taxes because lease payments are considered "rent expense" and therefore 100% tax deductible on your federal tax returns. (please consult your tax advisor)

Items Leased

  • Buildings
  • Vehicles
  • Machinery
  • Equipment

Benefits of Lease Financing

  • Conserves cash on hand – A lease can be written with as little as 10% down on our Harvest Plan. This 10% can be cash or equity in an equipment trade. This leaves our oerating capital at sufficient levels to cover the daily expenses of your operation.
  • 100% Financing Available – Leasing allows you to add all soft costs of a purchase into the lease including freight, training, warranties, etc. On building projects site preparation, electrical work, concrete, plumbing, etc. can be included in the lease.
  • Flexible Repayment Terms – The payments of your lease can be structured to coincide with the timing of your income stream. While most of our leases are written with annual payments, we can write monthly, quarterly, semi-annual, or skip payments to match livestock cash flow streams.
  • Split Equipment Costs – With equipment costs rising many farmers are sharing "big ticket" equipment. A lease payment can be prorated on a per acre basis so each farming operation pays their fair share of the rental payment.
  • Succession Planning – An operator planning retirement can utilize an equipment lease to reduce their income tax liability and then assign the residual (buyout) of the leased asset to the next generation of the operation.
  • Fixed Payments – Hedges against inflation and provides for imporved and easier budgeting due to the known fixed payment for the lease term.
  • Easily Trade/Update to New Equipment – Upgrade equipment at anytime during the lease term. Any equity gained in the existing leased asset is applied to the new leased item.
  • Flexible end-of-lease-options – Purchase the equipment. Renew the lease. Return the equipment to us.
  • No "Blanket Liens" – A leased asset stands on its own for collateral. Your equipment line remains unencumbered.
  • Preserves Existing Credit Lines – Use your credit lines for their intended purpose rather than pulling money from them to purchase equipment.
  • Sale/Leaseback – Any equipment you have paid for during the tax year can be sold to CGB and leased back to you allowing you to expense the payment. This is a very popular tax planning option.

Program Options

Lease terms vary greatly depending on the type of asset to be leased. While all farming operations differ in size and complexity, you can be assured that every client receives personalized support and guidance with flexible financing solutions to meet the goals you have set for your operation.

Borrower Qualifications

  • Debt to Asset Ratio < 50%
  • Total Debt Coverage > 1.35:1
  • Current Ratio > 1.00:1
  • Acceptable Credit History and minimum median credit score of 680