Justin Woodward, Vice President at Key Equipment Finance, shared multiple financing options for potato storage structures in a recent issue of Spudman.
“Fortunately, there are a variety of equipment financing options enabling growers to upgrade machinery or take advantage of advances in technology without a large outlay of cash,” Woodward wrote.
Many types of financing
Woodward wrote about the many types of financing available to those in the agriculture industry, specifically potato growers. The usual financing options are loan financing, and capital and operating lease financing, according to Woodward.
“Typically, a loan is the most popular equipment financing choice for those who can use the depreciation benefit and tax credit, if applicable. If a producer does not need the depreciation benefit or doesn’t value the depreciation, then an equipment lease might be a better value because it offers a lower rate, improves cash flow and provides other benefits,” Woodward wrote. Woodward went on to highlight the benefits of capital leases, including their flexibility and tax benefits. He pointed out that capital leases can be structured with a variety of options in place for the end of the term. For operating leases, Woodward wrote that one big benefit is the grower is able to deduct the entire lease payment on their P&L.
Financing potato storage structures
Woodward wrote that potato growers can greatly benefit from single purpose storage financing, a financing option that can help them build or upgrade a storage facility without a down payment and other fees associated with a real estate mortgage.
“Anyone who is planning to build a storage facility or make improvements to a facility may want to consider single purpose storage financing,” Woodward wrote.
Woodward highlighted other considerations for potato growers when it comes to financing equipment, including conserving cash and credit lines, competitive pricing and flexible payment options.
Woodward noted that finding the right finance provider for a grower’s particular needs is also an important part of the equation.
Woodward has over 22 years of experience in the equipment finance industry and is based in Boise, Idaho. Click below to read the article in Spudman.
