Farm Equipment Financing
Frequently Asked Questions
Below you’ll find answers to the questions we get asked the most about AgDirect® farm equipment financing.
What is AgDirect?
AgDirect is an equipment financing program offered by Farm Credit Services of America and other lenders, including participating Farm Credit System Institutions.
Who can get AgDirect financing?
The request for financing must be made by an eligible producer or farm-related service business.
What types of farm equipment do you finance or refinance?
AgDirect offers financing on all types of ag equipment, including the purchase and lease of tractors, combines, center pivots, implements, strip till equipment and more sold at a dealership, an auction and by a private seller. We finance all major farm and irrigation system equipment manufacturer brands, including John Deere, Case IH, New Holland, AGCO, Kubota, Reinke, Valley and Zimmatic.
Is AgDirect financing available in my area?
AgDirect is offered by participating Farm Credit System Institutions and available across the continental United States at more than 4,000 dealership locations. The types of financing transactions that may be
completed may vary and may be subject to territorial concurrence. Contact us for more information.
How do I apply?
There are five ways to apply for AgDirect financing:
- Equipment Dealerships — Participating dealers enter your financing application at the dealership. Contact us to find a dealer near you.
- Farm Credit Offices — Participating Farm Credit Associations offer AgDirect financing.
- AgDirect Inside Sales — Contact our Inside Sales team to get financing directly through AgDirect. Call 888-525-9805 or email us.
- AgDirect.com & AgDirect Mobile app — If you are buying new or used equipment through a dealer, auction or private party, you can apply for AgDirect financing or refinancing at agdirect.com or through AgDirect Mobile available to download from the App StoreSM and Google PlayTM store.****
Are there any fees?
AgDirect charges a nominal documentation fee. Servicing actions may also be subject to a fee.
What types of farm equipment do you finance or refinance?
AgDirect offers financing on all types of ag equipment, including the purchase and lease of tractors, combines, center pivots, implements, strip till equipment and more sold at a dealership, an auction and by a private seller. We finance all major farm and irrigation system equipment manufacturer brands, including John Deere, Case IH, New Holland, AGCO, Kubota, Reinke, Valley and Zimmatic.
What will you require from me to apply for financing?
The minimum personal information required to begin the AgDirect application process is your name as shown on your legal ID, age, U.S. citizenship status and minimal eligibility information, depending on what type of applicant you are. If you are a farmer or rancher, you'll need to provide net non-farm income and gross farm income.
How long will it take to be approved for financing?
For most applications, credit decisions are returned within seconds. Our goal is to process applications in three business hours.
Available Rates and Terms
What are your interest rates and available terms?
Whether you purchase through a dealer, private party or at an auction, AgDirect offers attractive fixed and variable interest rates. Rates and available terms vary by equipment type and amount financed. See current rates.
Do you require a down payment?
Generally, AgDirect borrowers need to put down 0% to 30% of the purchase price.
What are your various finance terms?
Subject to approval, the typical period used to amortize equipment debt is three to seven years and up to 10 years on pivots.
Can I prepay or pay off early?
If you make annual payments, you may prepay up to one year in advance; up to six months in advance for monthly payments; and up to two early payments for quarterly payments. You can also pay off early at any time with no penalty.**
What types of payment plans are available?
Typically, payment plans are set up on standard annual, semiannual, quarterly or monthly frequencies.
Understanding Variable Interest Rates
When might a variable rate make sense for my operation?
- You don't plan to have the loan for the full term (i.e., early payoff, early trade in).
- By opting for a variable rate, you can take advantage of a lower payment in the short term but carry the risk of a sudden rate increase.
- In the case of smaller transactions, a lower variable rate contract might make sense, allowing you to maintain working capital.
- Another instance where variable rates might be favorable is if the interest rate on your line of credit is equal to or higher than the variable rate of a loan.
How will I be notified of an AgDirect variable rate change?
You will receive a rate change notice letter via mail within 45 days.
How do variable rates work?
AgDirect's variable rate is tied to the prime index, which can be found at federalreserve.gov.
Payments adjust when the prime rate changes so a customer's loan remains fully amortized. There is no charge for this, and the customer will receive a notice of the rate change and new payment.
Can I switch to a fixed rate?
AgDirect customers can convert from a variable interest rate to a fixed rate. The fixed rate is determined by the published AgDirect rate at the time of conversion for the remaining term of the note at no cost.
When will the variable rate go up or down?
Typically, within 48 hours of when the prime rate moves, which is influenced by the Federal Reserve’s actions.
How long will the variable rate on my financing documents be effective?
The variable rate will fluctuate any time the prime rate changes as a result of the Federal Reserve’s actions.
How often do variable rates change?
These fluctuations can happen as often as every month or quarter or annually. Historically, the Federal Reserve meets quarterly; however, the Federal Reserve can meet as deemed necessary.
Is there a cap on how often the rate can fluctuate?
No. For example, between 2004 and 2006, the Fed moved rates for 17 consecutive meetings. And between 2015 and 2018, the Fed moved the rate nine times.
Is there a maximum increase or decrease?
No, but movement is normally in increments of 25 basis points (.25%, .50%, .75%, etc.).
What types of leases are available through AgDirect?
AgDirect offers both true tax and non-tax leases to meet producers' needs and unique tax situations, including FPO, PRO and PUT leases. With a true tax lease, you can deduct your full lease rental payment as an operating expense rather than depreciating
the asset. With a conditional sales lease, a common non-tax lease, you take depreciation just as you would with a loan while still benefiting from the traditional flexible financing offered in a lease.***
What happens if I want to trade in my equipment before the lease ends?
With an AgDirect lease, there is no early termination fee to trade in equipment or pay off your lease early as long as the payoff is under $500,000. In addition, your trade equity may be applied toward the first payment on your new lease.
What are my obligations for the equipment during the lease?
You are responsible for making the lease payment and all applicable operating costs, such as maintenance, sales and property taxes, license, registration and insurance. In addition, if hour limits apply, you will be responsible for any excess usage charges beyond the agreed-upon hour limits.
What happens to the equipment at the end of the lease?
All leases have end-of-lease purchase options listed on the lease agreement. One of our purchase options is called a fixed purchase option (FPO). With an FPO, you may trade in at any time. Or, at the end of the lease, you may purchase the equipment for the residual amount stated upfront or return the equipment to us.
The most popular purchase option is called a purchase or renew option (PRO). With a PRO, you may trade in at any time. Or, at the end of the lease, you may purchase the equipment for the residual amount stated upfront or renew the lease (no walk away option).
What if I choose to return the equipment?
Simply notify us 180 days prior to the end of the lease term. Schedule an inspection of the equipment to ensure that its condition is the same as when the lease was initiated (except for normal wear and tear) and in accordance with the terms of the lease contract. Make repairs if needed. And finally, deliver the equipment to a specified location — typically your local dealer.
Can I lease a piece of equipment that I've already paid cash for or have a loan on?
Yes — if you have acquired the equipment in the current calendar year, then a purchase leaseback may be an option. A purchase leaseback is a good way to replenish working capital and increase tax deductions while taking advantage of a low AgDirect lease rate. With a purchase leaseback, AgDirect will write a lease on your equipment and reimburse you the cash you originally paid for the equipment or will pay off your current loan or lease and apply the equity toward your new lease.
Should I refinance?
Refinancing is one tool producers can leverage to free up working capital and improve their financial positions, especially during periods of low interest rates. Unless you have one payment left on a loan or the interest rate you can get by refinancing is close to your current rate, it almost always makes sense to refinance higher rate notes. Another good time to consider refinancing is after an interest waiver. See our Learning Center article on managing working capital to determine if refinancing is right for you.
Does AgDirect refinance ag equipment?
It's common for a buyer to use a manufacturer's financing program at the time of the sale, then refinance with another source when it benefits them. Along with highly competitive rates, AgDirect delivers exceptional terms for refinancing higher interest loans or loans coming off 0% interest waivers. Farm Credit System debit is ineligible for AgDirect refinancing.
Start by comparing your potential savings using AgDirect's easy-to-use farm equipment loan payment calculator.
What farm equipment does AgDirect refinance?
AgDirect offers refinancing on all types of equipment, including the purchase and lease of tractors, combines, pivots, implements, strip till equipment and more. AgDirect finances the purchasing and leasing of all major brands of ag and irrigation system equipment, including John Deere, Case IH, New Holland, AGCO, Reinke, Valley and Zimmatic.
How do I apply for farm equipment refinancing from AgDirect?
With AgDirect, the steps for refinancing are simple, easy and require minimal information. In most cases producers can have their dealer process the refinance. Participating AgDirect dealer salespersons simply enter your refinancing application online. You can also apply for AgDirect refinancing through:
- AgDirect.com & AgDirect Mobile app — Quickly and easily refinance with our online application available at agdirect.com or through AgDirect Mobile available to download from the App StoreSM and Google PlayTM store.****
- AgDirect Inside Sales — Contact our Inside Sales team to get refinancing directly through AgDirect. Call 888-525-9805 or email us.
For more information, view current interest rates or review this Learning Center article on refinancing with AgDirect.
How long will it take to be approved for refinancing through AgDirect?
The application usually takes less than ten minutes. AgDirect will make the payoff to the bank or captive finance company, and if the producer is willing to sign the loan documents electronically, the dealer doesn't have to touch the deal again after the application is submitted.
What are the steps involved in at-dealership financing?
Our financing process is simple and eliminates the need for added trips or calls — everything can be completed right at the dealership.
Here's how it works:
- Dealer completes and submits your AgDirect application.
- Credit decision is returned to dealer, usually while you are still at the dealership.
- Dealer provides financing documents, usually the same business day.
- Simply review, sign and return all documents to your dealer.
- Funds are disbursed.
What information is needed to complete my application and generate my financing documents?
The following information is required:
- Serial number
- Purchase order (irrigation and refinance line of credit)
- Legal description and owner of property (irrigation only)
- Payoff information (refinance only)
- Title (front)
- Complete contact information and tax identification number for all applicants
- Copy of most recent unexpired driver's license for all applicants
Prior to release of funds to the dealership, the following is required:
- Signed documents faxed back to AgDirect or, if eligible, electronically signed — with all signatures and dates completed and all pages included
- Copy of first payment (lease only)
- Back of title showing proper transfer of ownership and correct lien holder
Can I get AgDirect financing from a non-AgDirect dealer?
If your dealer is not able to offer you AgDirect financing, call the AgDirect territory manager for your area or the AgDirect finance team at 888-525-9805.
What are the steps involved in applying for AgDirect equipment financing for a traditional or online auction?
Here's how it works:
- Complete our online financing application or contact AgDirect or a participating Farm Credit office to complete an application (minimum of two days prior to auction).
- Credit decision is typically returned within two hours. Our goal is to process applications in three business hours.
- Bid on and win equipment at auction.
- An AgDirect team member provides financing documents.
- Review, sign and return all documents to AgDirect.
- Funds are disbursed.
What do I need to finance my farm equipment bought at an auction?
The following information is required to complete the application process:
- Copy of driver's license for all individual buyers
- Bill of sale (transferring ownership from seller to buyer, sale price and full asset description — i.e., year, make, model, full serial number)
- Funding instructions (i.e., name and address of who should be funded, subject to other requirements)
- Auction company's contact information
Prior to release of funds to the dealership, the following is required:
- A subordination signed by any lenders that hold a blanket lien on the buyer
- A UCC-3 prepared and signed by the creditor if a blanket lien on the seller is located
- If an asset-specific lien is identified, funding will be issued to the creditor and seller
Prior to release of funds:
- All original signed loan documents returned to AgDirect
- Applicable lien releases signed and returned to AgDirect
- Additional information may be needed prior to funding, subject to each individual transaction
For more information, check out this Learning Center article on farm machinery auction trends and financing.
What steps are involved in applying for AgDirect financing for equipment purchased through a private party?
Here's how it works:
- Complete our online financing application or contact AgDirect or a participating Farm Credit office to complete an application.
- Credit decision is typically returned within two hours. Our goal is to process applications in three business hours.
- An AgDirect team member provides financing documents.
- Review, sign and return all documents to AgDirect.
- Funds are disbursed.
What do I need to provide AgDirect to finance my farm equipment purchased through a private party?
The following information is required to complete the application process:
- Copy of driver's license for all individual buyers
- Bill of sale (transferring ownership from seller to buyer, sale price and full asset description — i.e., year, make, model, full serial number)
- Funding instructions (i.e., name and address of who should be funded, subject to other requirements)
- Seller name and address
- Creditor information if applicable
AgDirect will complete a lien search on both the buyer(s) and seller(s) to ensure that AgDirect will be in the first lien position on this particular equipment.
Prior to the generation of documents:
- A subordination will need to be signed by any lenders that hold a blanket lien on the buyer
- A UCC-3 will be prepared and by the signed by creditor if a blanket lien on the seller is located
- If an asset-specific lien is identified, funding will be issued to the creditor and seller
Prior to release of funds:
- All original signed loan documents returned to AgDirect
- Applicable lien releases signed and returned to AgDirect
- Additional information may be needed prior to funding, subject to each individual transaction
What financing options are available through AgDirect for equipment purchased from a private party?
AgDirect offers highly competitive finance and lease options on farm equipment sold through private transactions. This allows producers to take advantage of the same attractive rates and ag-friendly terms they would find at the dealership while benefiting from the potential savings a private seller may have to offer.
In addition to benefiting from competitive finance and lease options, producers who opt for private party financing through AgDirect can count on a fast and streamlined application process.
*Subject to approval
**Excludes leases over $500,000
***Consult with a tax professional for advice on leasing options and tax issues
****Your mobile carrier’s message and data rates may apply
Learning Center
Agriculture is constantly evolving, which is why AgDirect® works to help you make the right decision for your operation when it comes to financing your next tractor, combine or other ag equipment.
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“AgDirect offers some really excellent programs and flexibility.”
– Dustin G.
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Livestock Producer and Part-Owner of Capital Tractor
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AgDirect makes equipment financing easy.
– John and Carla
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Grain & Beef Producers
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"With AgDirect, financing isn’t one-size-fits-all."
– Jordan S.
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Sales Representative, McRoberts Red Power
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