Money Minute: Lease or Loan, Which is the Best Option?

During September, Money Minute, an educational series from AgriFinancial and Hoosier Ag Today, will focus on when it is better for farmers to lease and when a loan is more advantageous.

In the series of four radio features, John Witt, with AgriFinancial explains the advantages of a lease in certain situations.

“We recommend that our farmers pay cash or do traditional loan financing for things that appreciate in value and use a lease form something that depreciate in value,” said Witt.

He said there are a variety of things that should be considered for a lease.

“Basically anything on the farm that is used in the farming operation, except the land,” said Witt.

Not only buildings and storage but even used equipment may be things to consider using for a lease.

In times of tight cash flow, using a loan will help free up cash on hand to be used for production or other operations on the farm.

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