8 min read
Farm Equipment Financing: The Complete Guide
By Christopher Chavez, Founder — Northwood Capital Group
Farm equipment is expensive, seasonal and long-lived — three things that make farm equipment financing look very different from a truck loan or a business line of credit. A combine runs for twenty seasons. A center-pivot irrigation system pays for itself across a decade of water savings. And most of the revenue that services the loan arrives in a handful of weeks each year.
This guide covers what agricultural lenders finance, what rates and terms look like in 2026, how seasonal payment structures work, and how Section 179 changes the real cost of the equipment you buy this year.
What farm equipment can be financed
Anything that is titled, serialized or permanently installed on the operation is financeable. The most common categories:
- Tractors — utility, row-crop and high-horsepower articulated units
- Harvesters — combines, headers, forage harvesters, nut shakers and sweepers
- Irrigation — center pivots, drip systems, pumps, filtration and well equipment
- Tillage and planting — planters, drills, discs, rippers and cultivators
- Application equipment — self-propelled sprayers, spreaders and nurse trailers
- Farm trucks and trailers — grain trucks, flatbeds, hopper bottoms and service trucks
- Handling and storage — grain bins, augers, dryers, telehandlers and skid steers
Farm equipment financing rates and terms in 2026
Rate is driven by four things: credit profile, age of the equipment, down payment and time in operation. These are the ranges growers see most often on application-only deals.
| FICO range | Down payment | Typical term | Rate range | Documentation |
|---|---|---|---|---|
| 700+ | 0–10% | 60–84 months | 7–11% | Application only to $250K |
| 660–699 | 10% | 60–72 months | 10–14% | Application only to $150K |
| 620–659 | 10–15% | 48–60 months | 14–19% | Bank statements or Schedule F |
| 560–619 | 15–25% | 36–48 months | 18–26% | Full farm financial package |
| ITIN (no SSN) | 20–25% | 36–48 months | 16–24% | 6+ months bank statements |
Financing amounts run from $25,000 for a single implement up to $5 million for a full fleet or a packing-line build-out. Deals under $250,000 are usually application-only — no tax returns required — which is why an in-season breakdown can be funded in a couple of days.
Loan vs. lease on farm equipment
Both structures are common in agriculture, and the right answer usually comes down to how long you intend to keep the machine.
| Equipment loan (EFA) | Lease | |
|---|---|---|
| Ownership | You own it from day one | Lessor owns it during the term |
| Down payment | 0–25% depending on credit | First and last payment typical |
| Monthly payment | Higher | Lower |
| Section 179 | Full expensing available in year one | Payments deducted as an expense |
| Best for | Tractors and implements you'll keep 10+ years | Technology-heavy machines you'll cycle out |
| End of term | Free and clear | Return, renew or buy out |
For a deeper breakdown, read our equipment financing vs. leasing comparison.
Seasonal and skip payments: the agricultural advantage
A row-crop operation does not earn evenly across twelve months, and a well-structured farm loan should not demand even payments. Agricultural lenders write three common structures:
- Annual payments — one installment each year, timed 30–60 days after your typical harvest settlement
- Semi-annual payments — two installments, useful for double-crop or split-harvest operations
- Skip payments — monthly payments with three to six designated skip months during planting or dormancy
Raise this at application, not at signing. Payment timing is part of how the deal is credit-approved, and it is much harder to restructure after documents are issued.
How to qualify for farm equipment financing
The process is shorter than most growers expect — five steps, and most of the work is document gathering.
- Prequalify with a soft pull. No credit impact, and it sets your equipment budget and down payment before you negotiate.
- Pull together your farm file. Two years of Schedule F or farm returns, three to six months of operating-account statements, the equipment quote, and your acreage and crop mix.
- Identify the equipment. Year, make, model, serial number and hours. Used units with documented service history finance normally.
- Match payments to your harvest. Request annual, semi-annual or skip-payment structures up front.
- Sign and fund. Application-only approvals to $250K often return the same day; funding follows in 24–72 hours.
Section 179 and farm equipment: the tax math
Section 179 lets you deduct the full purchase price of qualifying equipment in the year it is placed in service, rather than depreciating it across seven years. The part growers most often miss: you can finance the equipment and still take the full deduction. You put 10% down, make two payments, and deduct the entire purchase price.
On a $180,000 tractor placed in service in December, a farm in a 32% combined bracket deducts the full $180,000 and reduces its tax bill by roughly $57,600 — while having paid out only the down payment and a payment or two. The equipment must be in your possession and in use before December 31, which is why financing applications spike every fall.
Our Section 179 guide walks through current limits, the phase-out threshold and bonus depreciation. Confirm your own numbers with your CPA.
Common mistakes growers make
- Waiting until the machine breaks. An emergency replacement in July gets financed at worse terms than the same unit sourced in February.
- Accepting monthly payments by default. If your revenue is seasonal, your payments should be too — ask.
- Shopping rate only. A slightly higher rate on an 84-month term with annual payments can be far easier on cash flow than a cheap 36-month monthly note.
- Financing December purchases in December. Equipment must be placed in service by year end. Start the file in October.
Get farm equipment financed
Northwood Capital finances agricultural equipment nationwide from $25,000 to $5 million, with seasonal payment structures, used-equipment programs and ITIN options. See our agricultural equipment financing programs or, if you farm the Central Valley, our Fresno ag equipment financing page.
Start your file on the apply page, or call (714) 679-8886 to talk through structure with an agricultural finance specialist.