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Should I Get a Loan or Lease for Deere Tractors?

Posted On: July 12, 2017 author Paul Kendall

 Looking into purchasing farm equipment? Do you already know what kind of equipment you need? The brand? The cost?

We know you’ve probably already done a lot of research, and chances are you’ve come to the same conclusion as us: John Deere is usually the way to go when it comes to finding quality farm equipment; it’s a well-known brand after all.

As you’re looking at the prices for John Deere equipment (or any farm equipment for that matter), the price tag can seem a little overwhelming at first, unless you’ve been in the farming business for a while and know what to expect.

This is where the debate comes in: do you get a loan or try to lease John Deere equipment? What’s the best financing option?

Like most financial situations: it’s depends. Every farm business is unique, and therefore the answer for you will depend on your situation. So consider the questions and financial factors below as you decide which is best for you.


What’s Your Farm Equipment Budget?

The budget you set for your farm business will depend on what kind of equipment you can get and the type of financing that will be best for you. The money you have available will determine your eligibility for certain financial deals.

What Is Your Business & Personal Financial Details?

Unsurprisingly, knowing what your business and personal financial stats are at is extremely important. If you don’t know, make sure you know what they are:

  •  Years in business.
  • Credit score.
  • Annual revenue.
  • Available funds (e.g., for a down payment).


Any agricultural equipment financing company from John Deere tractor leasing companies to banks giving you a loan will typically ask for this kind of financial information.

Main Differences for John Deere Tractor Leasing vs. Loans


Depending on who you talk to, some will say that leasing is better than loans, whereas others will say loans are better than leasing. It really comes down to your situation and what you feel is more valuable in your business.

The quick and dirty summary of leasing vs. loans:

 Equipment Leasing - you get to use John Deere farm equipment on day one, as if you own it, and make monthly payments until you pay it off. At the end of your lease, you will have the option to either a) purchase (called a “balloon payment”) and own the John Deere farm equipment, or b) walk away to look for different farm equipment.

Loans - unlike a lease, you’ll make no balloon payment at the end of your final payment, and will keep the farm equipment. Loans sometimes have lower (or no) down payments.


Making the Decision: Loan or Lease for John Deere Farm Equipment?


In both situations, you get to utilize the John Deere farm equipment on day one, as if you own it. The major difference is the beginning and end of the financing agreement.

 How much cash can you put up at the beginning of the agreement and do you want to own the equipment at the end of the agreement?

 There are other tax implications that can factor into your decision making as well (and remember to always talk with a tax professional, as specifics can change from year to year).

 When it comes to loans, you can use the loan amount of your John Deere equipment purchase as a tax deduction. Agricultural business owners presume ownership at the end of the agreement. Agricultural equipment financing enables business owners  too utilize Section 179 tax code where business owners can accelerate depreciation and write off the entire purchase price in year 1 off there taxable income, or farm business owners can depreciate the asset over its useful life and take a small tax break each year. There are bonuses and limits to section 179. 

 For equipment leases, you can actually use the payments themselves as tax deductions. Therefore, even though you may be “paying more” in an equipment lease than a loan in the long term, you might be able to deduct more for your taxes, depending on how your agreements are established.

 At the end of the day, both options are completely valid for acquiring farm equipment. What really matters is how you want to structure your finances in the long term (e.g., 5 years). Do you want to optimize tax deductions? Do you have enough cash on hand to afford a down payment upfront? Are you interested in keeping your farm equipment at the end of your agreement, or do you plan on trying different equipment before fully committing?


Where to get John Deere Tractor leasing?

Although people normally apply for business loans like agricultural equipment financing at a bank, it may not be the best choice for your business. 

When  you apply for a bank loan it will have an impact on your credit score, and there’s no guarantee that you’ll get the tractor financing because of there tight credit windows.  You also need to undergo a lengthy procedure to determine if you can repay the loan or not. Bank will always ask for your tax returns. 

To avoid the hassle of the long and tiring screening and applying procedures from your local bank, it’s better to look for john deere tractor leasing companies.  Unlike banks, john deere tractor leasing companies have a lower requirement standards and most of them can be found online. 

An example of a great agricultural leasing company is Trust Capital USA.  They provide specialized financing and leasing programs for farm owners, and can finance up to $300,000 with a simple one page equipment financing application.  And you’re still eligible for their john deere tractor leasing programs even if you have a bad credit.

Other benefits of  Trust Capital USA include no upfront costs, and no “extra” fees. Their loans have very affordable rates, and you can also save with  repayment and loan renewals.  Best of all their loans are also very easy to apply for: you only have to fill a one-page application on their website.

Give Trust Capital a call at 866-458-4777 to discuss if you should get a loan or a lease for a John Deere Tractor 

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