You’ve spotted a piece of equipment that would fit nicely on your farm. You go into the dealer’s office with your financing all lined up.

But hold on a minute. Could there be a better way to buy or lease that machinery?

“AgDirect may have a lower rate or a better lease option,” says Greg Roberg, vice president for AgDirect Sales-East Region.

What’s AgDirect, you ask?

AgDirect, based in Omaha, NE, is the equipment financing arm for many Farm Credit cooperatives across the country. AgDirect works with both new and used equipment, and can help finance or refinance a sale or lease through a dealer, auction, or private party.

How it works

AgDirect works with over 4,000 farm equipment dealers; in fact, 70% of its business comes through this dealer network. U.S. farm equipment point-of-sale financing annually exceeds $20 billion so it is a big pie that AgDirect and others are competing in.

If you’re ready to finance equipment, a dealer salesperson or finance manager has the option to create a retail installment contract or lease agreement with AgDirect. One potential advantage in using AgDirect is quick turn turnaround time. The dealer can create an application and get documents you can sign physically or electronically in half an hour or less. That happens 60% of the time, says Roberg.

“Three-fourths of our business is pulling a credit report with an application,” says Roberg. “The other 25% is getting a balance sheet and reviewing financials to make a good lending decision.”

AgDirect’s largest client is equipment dealers, but they also work closely with loan officers at Farm Credit.

“A lot of times when we get an application from a dealer, a loan officer has usually said, this is a sound investment, so approval is pretty quick,” explains Roberg.

AgDirect’s most popular asset is farm tractors - one of every three, to be exact. About 55% of those financed by AgDirect are used tractors and 45% are new.

“We can finance up to 7 years with nothing or little down on new or newer equipment, especially tractors, combines, planters and sprayers,” says Roberg.

AgDirect’s terms are competitive with ag banks with its ties to Farm Credit. “Because AgDirect is part of the Farm Credit System we have access to one of the largest and most reliable sources of capital in the U.S. positioning AgDirect as a very competitive option for equipment financing,” Roberg explains. “We are 100% committed to agriculture and we love what we do.”

Boom times over?

Working in the equipment financing business for over two decades has given Roberg a broad perspective on equipment trends. 2020 and 2021 were record years for farm equipment dealers and lenders like AgDirect, largely because interest rates were 3.5% and borrowers were coming off big years of record government payments amid high crop prices. So, farmers were in the mood to buy equipment – to upgrade but also to manage their tax liability.

Demand outpaced supply quickly wiping out inventories of ag dealers’ lots across the country. Then came a pandemic pinch in manufacturing in late 2021 and all of 2022 with supply chain challenges, which has slowly gotten ironed out.

The shortage of new equipment drove up used equipment values, but Roberg says the manufacturers are pretty much all caught back up. “Ag manufacturers and their dealer network have done a masterful job of getting the ag industry back to a more normal manufacturing cycle in the past 9 -12 months,” he says.

To learn about AgDirect’s rates and terms, ask your equipment dealer, your Farm Credit Cooperative, go to the AgDirect website, or the AgDirect mobile app. Or, just call their number: 888-525-9805.

“We’re here to serve those that feed America and are someone you can call to ask questions about interest rates, create a custom quote, or help you find your nearest AgDirect dealer. We pride ourselves on someone will answer the phone right away when you call,” concludes Roberg.