Quick answer: Tight windows, wet crops, and elevator lineups make on-farm drying and storage a cash-flow decision as much as an agronomy one. Leasing with private/alternative lenders lets you stage vendor payments, bundle “invisible” costs (concrete, electrical, controls), and match installments to crop receipts—without draining working capital needed for inputs.
Mehmi Financial Group finances ag equipment across Canada and, where inventory fits, can sell and finance select assets in a single package. If you want a second set of eyes on your dealer quote, feel free to contact our credit analysts.
What’s financeable on a dryer/bin file
- Grain dryers: continuous flow, batch, mixed-flow; burner upgrades, moisture controllers
- Storage & handling: corrugated bins, floors, stairs, fans, aeration, hopper cones
- Movement: legs, conveyors, augers, distributors, spouts, gates
- Controls & safety: panels, VFDs, sensors, remote monitoring, fire suppression
- Site work (eligible portions): concrete pads/rings, electrical service, gas hook-ups, commissioning
- Soft costs: delivery, craning/rigging, engineering, permits, training
Start ballparking payments with our calculator; see core options at Financing & Leasing.
Alt-lender structures in plain English
| Structure | Best For | Cash-Flow Effect | End-of-Term |
|---|---|---|---|
| FMV (Operating) | Lower monthly; plan to refresh or expand | Lowest payment; flexible at upgrade | Return, renew, or buy at fair value |
| $10 / Fixed-Residual (Capital) | Dryers/bins you’ll keep long-term | Moderate payment | Title transfers for nominal/fixed amount |
| Sale-Leaseback | Turn owned gear into cash for upgrades | Immediate liquidity | Reacquire at residual buyout |
| Progress-Funding | Multi-trade installs over weeks/months | Interest on draws; converts at acceptance | Term begins after commissioning |
If cash is tight during build, a revolving buffer can help: Line of Credit & Working Capital. For B2B receivables (custom drying/storage), consider Invoice Factoring.
BDC’s equipment-financing guide emphasizes the complete financing structure when comparing offers.
“Don’t focus only on interest rates”
For the equipment decision discussed here, compare the amount financed, payment schedule, collateral and remaining obligations alongside the quoted rate.
Typical alt-lender terms, sized for ag seasonality
- Term: 36–84 months, depending on ticket and useful life
- Payments: Seasonal/skip options (lighter pre-harvest; heavier post-delivery cheques) or step-up during ramp
- Down / first & last: 0–15% or 1–2 payments in advance; improves pricing on C/D files
- Security: PPSA on assets, insurance with lender as loss payee; appraisals on larger tickets
- Refi window: After 12–18 clean payments, revisit rate/term via Refinancing & Sale-Leaseback
What private underwriters actually look for
- Asset & contractor quality: OEM, BTU/CFM sizing, controls, parts support, installer track record
- Project plan: Pad, power, gas, electrical one-line, commissioning checklist, acceptance criteria
- Bank-statement coverage: 6–12 months showing room for the new payment (even if taxable income is modest)
- Operation snapshot: Acres by crop, historical moisture, elevator waits, basis; custom-work revenue if any
- Risk mitigants: Proper insurance, moisture/fire safety plan, verified gas/electrical scope
Cost items farmers forget to budget (bundle them)
- Concrete ring/pad and rebar
- Three-phase service, panels, trenching, disconnects
- Gas line, regulators, permits, inspection
- Crane/rigging, conveyors/legs tie-ins
- Commissioning, training, remote monitoring setup
Bundling these inside the lease is typically cheaper than stretching cash mid-install.
Broker fast-track: from quote to commissioning
- Lock the bill of materials. Dryer model, bin specs, legs/conveyors, controls, and all site-work quotes.
- Pick the structure. FMV for flexibility; fixed-residual if you’ll keep long-term; sale-leaseback to fund the down.
- Package the file. Application/IDs/void cheque; farm/corp docs; last filed year + YTD interims; 6–12 months bank statements.
- Add a simple utilization model. Expected points of moisture removed, bushels dried/stored, avoided shrink/dockage, basis capture.
- Milestone funding. Deposit → delivery → set-in → electrical/gas complete → acceptance certificate; vendors are paid on time.
- Seasonal/step-up payments. Align installments to receipts.
- Month 12–18 review. If performance is strong, consider a refinance to trim the monthly.
Compact case study
A mixed-grain farm needed a mixed-flow dryer, two 30k-bu bins, aeration, and a leg—$612k installed. Bank passed due to a volatile prior year. We arranged a 72-month FMV with progress-funding across concrete, set-in, and commissioning; seasonal payments heavier Oct–Dec. Soft costs (pad, electrical, gas, crane) were bundled. After 14 clean payments, we refinanced and reduced the monthly ~8%.
Approval checklist (credit-analyst view)
- Application, IDs, void cheque
- Farm/corporate registration and ownership
- Last filed financials, YTD interims, 6–12 months bank statements
- Vendor quotes with detailed scope; installer credentials
- Electrical/gas drawings or one-line, pad spec
- Insurance binder naming lender as loss payee
- Utilization sheet (bushels, moisture points, timing)
Short on paperwork? Send what you have—we’ll stage the rest so underwriting doesn’t stall. For a quick payment preview, use the calculator.
Authoritative references
- Innovation, Science and Economic Development Canada — Canada Small Business Financing Program:
The Canada Small Business Financing Program makes it easier for small businesses to get loans from financial institutions by sharing the risk with lenders.
Program eligibility, lender criteria, tax treatment, and product terms can change. Verify current official guidance and the final financing documents before making a decision.
FAQs
Can I finance site work and installation inside the lease?
Often yes—concrete, electrical, gas, rigging, and commissioning are commonly eligible.
Do lenders accept seasonal payments for dryers/bins?
Yes. Seasonal or skip schedules are standard on ag files.
Will alt-lenders fund used bins or relocated dryers?
Often—with inspection, parts support, and credible contractor scope.
What credit score is “enough”?
Many prefer 650+, but stable deposits, strong collateral, and a clear project plan can offset thinner credit.
Can payments drop later?
Often. After 12–18 on-time payments, we can explore refinancing to reduce rate or extend term.
If you’d like a no-pressure comparison of FMV vs. fixed-residual—or help structuring seasonal and progress-funding—feel free to contact our credit analysts. Explore options: Financing & Leasing • Refinancing & Sale-Leaseback • Equipment Line of Credit • Invoice Factoring • Calculator • Contact Us