How to Finance a Compact Tractor

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Compact tractors are versatile. They are able to handle small projects--cutting a lawn or hauling wood-- and bigger jobs when an angle rake, snow blower, or soil cultivator accessory is used. Whether purchased for residential or business applications a compact tractor can be purchased for cash or obtained by leasing or equipment financing.

Instructions

Explore equipment leasing. Many of the compact tractor manufacturers offer equipment leasing to their customers. Bobcat, John Deere, Mahindra and Caterpillar are among the big names in this industry that routinely provide equipment leasing terms to their customers. Find the tractor that you like and then ask about leasing terms.

Consider equipment financing. The same companies that provide leasing to customers offer low or zero percent financing for 36 months or longer. Not every model is included, and only participating dealers may provide a loan through the tractor company's financing arm. Ask your retailer about loan options.

Obtain bank financing. Your bank may be willing to finance your equipment purchase. Contact your banker to see what loans are available to you. If your bank approves your request, you can also ask for a letter of credit when shopping for a compact tractor or other equipment. A letter of credit helps solidify you as an excellent credit risk in the eyes of other businesses. Obtain a loan through your bank and keep the rebate, if offered, in lieu of tractor manufacturer financing.

Tap your line of credit. If you already have a line of credit established with your bank, those funds can be tapped. While equipment leasing and equipment financing have advantages, your credit line allows you to negotiate your best deal without relying on manufacturer financing assistance. Check with your accountant to learn if there are tax advantages.

Tips

  • In 2010, demand for equipment is low, but inventories are high. Use a buyer's market to your advantage.

Warnings

  • You may pay more for needed accessories if you buy these items later. Negotiate the best deal with blades, shovels and rakes included.

References

Resources

About the Author

Charles Green is a freelance writer in North Carolina who has been writing since 1992 and freelancing since 2002. His work appears in "435 South Magazine," "Wisconsin Golfer" and for various websites. Green earned a Bacheler of Science in business administration from Ramapo College of New Jersey.

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