.avif)
Learn how agriculture equipment dealers can offer customer financing in the U.S. and Canada for tractors, combines, sprayers and used machinery.
A farmer may need the tractor, combine, sprayer or forage harvester on your lot but still hesitate to put several hundred thousand dollars into one purchase.
That is not necessarily a bad customer.
The farm may need the machine before planting or harvest while keeping cash available for seed, fertilizer, feed, fuel, labour, land rent, repairs and other seasonal expenses.
Agriculture equipment dealers can address that problem by making financing part of the sale instead of sending the customer away to arrange funding alone.
Quick Answer: Agriculture equipment dealers can offer customer financing through commercial lenders, lessors or financing brokerages rather than lending their own money. The dealer identifies the equipment and introduces financing, while the finance provider handles underwriting and funding. Farm cash flow, seasonality, equipment condition, trade equity and jurisdiction all affect the final structure.
The cleanest structure separates the equipment sale from the credit decision.
Your salesperson identifies the machine the customer wants and prepares a detailed quote.
The customer then applies through the dealership's financing process.
A third-party lender, lessor or brokerage evaluates the farm, equipment and requested structure. If financing is approved, the customer receives the applicable terms and a list of conditions that must be completed before funding.
Once documentation, customer contribution, insurance and other closing requirements are satisfied, the financing provider funds the transaction according to the agreement.
The dealer gets paid for the equipment.
The farmer repays the financing provider.
Mehmi Financial Group's current vendor program specifically includes tractors, sprayers, harvesters, irrigation systems and attachments among the agricultural assets dealers can submit through its North American program.
Canadian dealers wanting a farm-specific version of the workflow can also review Mehmi's existing Agricultural Equipment Dealer Financing Program in Canada.
The exact asset eligibility depends on the finance provider, but agriculture dealers regularly handle equipment such as tractors, combines, headers, sprayers, seeders, planters, balers, forage equipment, grain-handling machinery, loaders, livestock equipment and eligible attachments.
The lender does not simply see "farm equipment."
It sees a specific asset with a particular age, expected useful life and resale market.
A late-model 200-horsepower row-crop tractor with clean hours and a broad secondary market represents a different collateral risk from highly specialized machinery built for a narrow crop or production process.
The same is true of combines.
Credit may want the model year, separator or engine hours, header configuration, service history, included components and purchase price.
For the borrower-side Canadian perspective, Mehmi's Agricultural Equipment Financing Canada guide explains how tractors, combines and harvesters are assessed.
The broader Farm Equipment Financing & Leasing Canada guide also covers tractors, air seeders, planters, sprayers, hay equipment, grain systems and livestock equipment.
Agriculture is seasonal.
That changes the repayment conversation.
A warehouse may produce relatively consistent sales throughout the year. A grain operation can spend heavily during planting and receive a much larger share of its cash after harvest.
A cattle, dairy or poultry operation may have a different revenue pattern again.
That means the best repayment schedule is not automatically twelve identical monthly payments.
Agricultural financing can sometimes be structured with monthly, quarterly, semi-annual or seasonal payments where the financing provider supports that structure.
The important point is not to promise a seasonal payment plan before underwriting.
It is to recognize the farm's actual cash-flow cycle before deciding how the financing should be structured.
Mehmi's Canadian Seasonal Farm Equipment Financing guide goes deeper into annual, semi-annual, skip and harvest-aligned payment structures.
A dealer salesperson should therefore ask early:
When does this farm generate most of the cash that will support the equipment payment?
That question can be more useful than immediately quoting the longest available term.
A financing-ready quote should tell the finance provider exactly what is being purchased.
Include the customer's correct legal business or farm name and the dealer's legal name.
For the equipment itself, include the year, make, model and serial number when available.
For used machines, show current hours.
If the deal includes a header, loader, duals, GPS equipment, precision-ag technology, attachments or another significant component, identify it separately.
Also show the cash purchase price, deposit, trade-in allowance, freight, installation and applicable taxes.
Avoid invoices that simply say:
"Farm equipment package: $300,000."
The underwriter needs to understand what makes up that $300,000.
This becomes particularly important when attachments or installation costs are being financed. Mehmi's Accessories, Installs and Attachments Financing guide explains why separately identifying the base asset and supporting equipment can reduce funding questions.
Used farm machinery can potentially finance well, but condition becomes more important.
A tractor's age tells only part of the story.
Hours, maintenance history, tire condition, drivetrain condition, hydraulics, emissions equipment and previous repairs can materially affect remaining useful life.
Combines and harvest equipment can require even more scrutiny because downtime during a short harvest window can be expensive.
Dealers should accurately disclose machine hours and significant known equipment history.
The financing term should also make sense relative to remaining useful life.
Making the monthly payment lower by extending a worn machine over an aggressive term does not necessarily improve the economics.
The customer could eventually be paying a loan or lease while simultaneously facing large repair bills.
Canadian dealers handling older inventory can refer customers to Mehmi's Used Equipment Financing guide for additional context on age, condition, valuation and resale risk.
A good tractor does not automatically make a good credit file.
The farm still needs to generate enough cash to repay the financing.
Depending on the transaction, the finance provider may review operating history, cash flow, credit history, existing loans and leases, liquidity and current equipment obligations.
Agricultural underwriting can also require information that would be unusual in another industry.
That may include cultivated acreage, owned versus leased land, crop mix, livestock numbers, production history or information explaining how a new machine affects capacity.
Replacement and expansion purchases should be distinguished.
A farm replacing a combine that has harvested 4,000 acres every year already has an operating history for that equipment need.
A farm buying a second combine because it plans to double acreage needs to explain how that expansion will work.
The finance provider may require more documentation as transaction size and risk increase.
Mehmi's Farm Equipment Approval Checklist identifies complete equipment specifications, clear ownership history, condition information and a repayment structure that reflects the farm's cash cycle as important parts of a funding-ready file.
There is no universal credit score, down payment, acreage or revenue requirement that guarantees approval.
Trade-in allowance is not the same as customer equity.
Suppose a dealer offers $150,000 for a farmer's current tractor.
If the customer still owes $100,000 on it, the potential gross trade equity is approximately $50,000 before other transaction adjustments.
That existing secured debt needs to be identified and properly discharged or otherwise handled.
U.S. equipment lenders can secure farm machinery through Article 9 of the Uniform Commercial Code, with filings generally handled through state systems.
Before assuming a traded tractor is free and clear, the appropriate lien and ownership checks should be completed.
The dealership should coordinate with the financing provider rather than relying solely on the customer's statement that the machine is "paid off."
Canadian security registrations are provincial.
Ontario, for example, operates a Personal Property Security Registration system where creditors can register security interests and search for liens on personal property.
Other common-law provinces have their own PPSA systems.
Quebec uses the RDPRM framework. Quebec's registry guidance specifically identifies commercial equipment, tools and tractors among types of movable property that can be subject to registered rights.
For the dealer, the practical rule is simple:
Do not treat a trade-in as clean equity until existing secured interests have been addressed.
Potentially.
A farm purchasing a tractor may also need a loader, mower, snow blade, precision system or another implement.
A combine transaction may include a header.
A seeding package may include multiple pieces of equipment.
The finance provider will generally want the components clearly identified and priced.
The broader the package becomes, the more important it is to distinguish productive hard assets from miscellaneous costs.
Financing $250,000 of identifiable equipment is different from financing a $250,000 invoice where $40,000 is labelled simply "other."
Dealers should also confirm whether different suppliers will need separate payouts.
If a tractor comes from your dealership but another company is installing a specialized system, clarify the funding structure before delivery.
Assume an established U.S. farm purchases a tractor for USD $250,000.
For illustration only, assume:
Using standard monthly amortization, the estimated payment is approximately USD $4,127.45 per month.
Over 60 scheduled payments, estimated loan repayment would be approximately USD $247,646.79, including approximately USD $47,646.79 of interest.
Including the USD $50,000 customer contribution, total cash paid toward the tractor purchase and assumed financing would be approximately USD $297,646.79, before excluded costs.
This is an illustration, not a Mehmi Financial Group offer or indication of currently available pricing.
Annualized, those monthly payments represent roughly USD $49,529 of scheduled debt service.
A farm should therefore test the purchase against a conservative operating year, not only a strong harvest.
If the tractor eliminates significant custom-work expense, reduces downtime or supports additional profitable acreage, it may have a clear economic case.
But the farm still needs enough liquidity for seed, fertilizer, feed, labour, fuel and unexpected repairs.
Canadian customers can model CAD loan and lease scenarios using Mehmi's Equipment Financing Calculator. The calculator is denominated in Canadian dollars, excludes applicable taxes and states that results are estimates rather than financing offers.
Sometimes.
They are worth knowing about, but a dealer should not assume every customer qualifies.
USDA's Farm Service Agency offers direct and guaranteed Farm Operating Loans that can be used for eligible farm equipment purchases.
Current FSA guidance says direct operating loans can be made up to USD $400,000, while guaranteed operating loans are made by commercial lenders and can also finance farm equipment. Eligibility and underwriting requirements apply, and direct FSA programs are particularly intended for farmers who cannot obtain suitable commercial credit elsewhere.
That can make FSA financing an alternative for some U.S. customers, but it is not a substitute for a dealer's normal commercial financing workflow.
Canada's Canadian Agricultural Loans Act program works differently.
CALA is a federal loan-guarantee program delivered through participating lenders. Agriculture and Agri-Food Canada currently states that the government guarantees 95% of an eligible lender's net loss.
The maximum aggregate borrowing limit for one farm operation is CAD $500,000, with a maximum of CAD $350,000 for purposes other than land and building purchases, including qualifying equipment.
Again, the participating lender makes the loan.
A dealer should present CALA as a possible financing route rather than implying that the dealership or Mehmi controls eligibility.
Canadian farm equipment has an important tax wrinkle.
Not every piece of agricultural equipment receives identical GST/HST treatment.
The Canada Revenue Agency states that certain prescribed farm equipment is zero-rated when supplied by way of sale, provided the equipment meets the applicable specifications or design criteria.
CRA also states that the supply of prescribed farm equipment by lease is taxable, even where the direct sale would have been zero-rated. An end-of-term purchase may potentially be zero-rated if it constitutes a qualifying sale.
That distinction can materially change a customer's cash-flow comparison between purchasing and leasing.
Dealers should therefore not quote "no tax" simply because the customer is a farmer.
The specific equipment and structure matter.
For Canadian customers comparing ownership structures, Mehmi's Farm Equipment Financing & Leasing guide can be used alongside advice from the customer's accountant.
Commercial financing rules can vary by state.
California, for example, requires covered providers making specified commercial financing offers to provide prescribed disclosures covering items including funds provided, dollar cost of financing, term, payment amounts and prepayment policies.
The exact obligations depend on who is acting as the provider or broker and the transaction involved.
A multi-state agriculture dealership should therefore not create one aggressive financing advertisement and assume it works everywhere.
Use financing-partner-approved language and confirm actual state availability.
That is particularly important when advertising rates, monthly payments, down payments or "instant approval."
Salespeople should introduce financing without making credit decisions.
A useful conversation is:
"Are you paying cash, using your existing agriculture lender, or would you like us to arrange financing options for the equipment as well?"
That keeps financing connected to the sale.
The salesperson can then gather the purchase amount, machine information, customer location and whether the equipment is replacing an existing machine.
Avoid saying:
"You're approved."
Avoid promising a particular interest rate.
Avoid promising no down payment.
Avoid assuming the customer qualifies for annual or seasonal payments.
Those decisions belong with the financing provider after underwriting.
Canadian dealers building this process can use Mehmi's How to Offer Financing to Equipment Customers guide and its Third-Party Dealer Finance Program guide as sales-process references.
Most avoidable delays occur between approval and funding.
The customer may be approved, but the transaction can still be waiting for a serial number, insurance, final invoice, customer contribution, lien payoff or signed documents.
Used machinery can require additional verification.
A trade-in can delay funding when its existing lien is discovered late.
Equipment substitutions matter too.
An approval for a three-year-old tractor with 1,200 hours should not automatically be treated as approval for a different seven-year-old machine with 5,000 hours.
The asset was part of the underwriting decision.
Agriculture dealers should establish one clear internal rule:
Do not release financed equipment solely because the customer says the financing was approved. Follow the finance provider's confirmed release and funding instructions.
Mehmi's Vendor Financing Program Canada guide provides additional dealer-side guidance on keeping applications, conditions and vendor payouts organized.
Financing should support a commercially sensible purchase.
It should not make every machine automatically affordable.
If the farmer needs a specialized implement for only a few days each year, custom hiring or renting may make more financial sense.
If an existing tractor has low utilization, adding another unit may simply add debt.
A farm with ongoing operating losses may need to address profitability before increasing fixed obligations.
The same applies to an older used machine where the lower purchase price is offset by likely repairs and downtime.
Sometimes the best solution is a smaller machine, more customer equity, waiting another season or borrowing less.
Yes. Dealers can work with commercial lenders, lessors or financing brokerages that provide the underlying credit. The dealer sells the equipment while the finance provider handles underwriting, documentation and servicing.
Potentially. Finance providers typically place greater emphasis on age, hours, condition, maintenance history, purchase price, ownership history and remaining useful life for used machinery.
Sometimes. Seasonal, semi-annual or annual structures may be available depending on the financing provider and customer's cash-flow profile. They should not be promised before approval.
Potentially. Clearly itemizing the tractor and each major attachment or implement makes the transaction easier to evaluate.
Yes, but newer operations may need to provide more information about the operators' farming experience, cash contribution, production plan, contracts, liquidity and repayment source.
No, not in a normal third-party dealer program. The financing provider determines approved pricing, payment structure and credit conditions.
Documented trade equity can potentially contribute to the transaction. Existing financing on the traded machine needs to be identified and resolved before the full trade allowance can be treated as equity.
Potentially, provided the financing program supports the customer's actual state or province. U.S. commercial-financing rules, Canadian tax treatment and secured-property registrations must be handled under the correct jurisdiction rather than treating the two countries as interchangeable.
Agriculture dealer financing works best when it reflects how farms actually operate.
Start with the equipment your dealership sells, average transaction size, new-versus-used mix, typical trade-ins and customer production cycles.
Then build a repeatable process for quoting, applications, equipment specifications, seasonal cash-flow discussions, trade-in liens, underwriting conditions and dealer payout.
Mehmi Financial Group's current Vendor Financing Program states that it supports dealers, OEMs and distributors across North America, including sellers of tractors, sprayers, harvesters, irrigation systems and agricultural attachments. Mehmi operates as a financing brokerage and intermediary, while independent funding institutions make final underwriting and pricing decisions.
To discuss customer financing for your agriculture equipment dealership, contact Mehmi Financial Group at 833-863-4644 through the verified Mehmi Financial Group contact page. The current page confirms the toll-free number.
Include your typical financing amount, U.S. or Canada, state or province, agriculture equipment sold, new-versus-used mix, typical trade-ins and expected transaction timing so the financing program can be evaluated around the farm customers your dealership actually serves.
.svg){kind=small}