Farm equipment loans that fit the season
Agricultural finance covers the machinery that runs a farm: tractors, headers, balers, spray rigs, seeders, farm utes and more. Like other equipment finance, a farm equipment loan is secured against the machine, which keeps the rate sharper than unsecured borrowing.
What sets farm lending apart is the income. It comes in with the harvest, the wool clip or the sale yards, not in neat monthly amounts. Some lenders will structure repayments around that, and it's often the difference between a loan that works and one that pinches.
Who farm equipment finance suits
Anyone running a farm or an agricultural business that needs machinery to do it. The right structure changes more with the operation than with the machine.
Croppers and mixed farms
Headers, tractors, air seeders and sprayers, bought around sowing and harvest. Seasonal or annual repayments can line up with when the grain cheque lands.
Graziers
Utes, side-by-sides, feed-out wagons, stock crates and yards. Income follows the sale yards and the wool clip, so repayments can follow it too.
Dairy
Income is steadier and monthly, so standard repayments often suit. Tractors, feed gear and farm vehicles are funded the usual way.
Horticulture and vineyards
Narrow tractors, harvesters, sprayers and mobile irrigation gear. Income bunches around harvest, which suits a seasonal structure.
Ag contractors
Hay, spraying, harvesting and cartage contractors. Assessed as a business, on contract income and how steady the work is.
Hobby and lifestyle blocks
A small tractor for a block that is not run as a business is usually a personal secured loan, assessed on your personal income.
One thing to know early: gear fixed to the land, such as an installed irrigation system or a dairy shed fitout, is harder for a lender to take security over than a machine that drives away. Fewer lenders fund it as equipment, so it is worth asking before you order it.
Repayments built around your income
Seasonal repayments
Larger repayments in the months your income comes in, and smaller ones, or none, in the months it doesn't. Not every lender offers it, so it's one of the first things we check.
Balloon payments
A balloon lowers repayments across the term, with a lump sum timed for when you expect to trade the machine in. See balloon payments explained.
A delayed first repayment
Some lenders will hold off the first repayment for a period, which helps when you buy ahead of the season.
Typical terms
These are common ranges, not promises. Every lender sets its own policy, and the machine and your records decide where you land.
- Term: often three to seven years. Older machinery tends to get a shorter term, because many lenders cap the machine's age at the end of the loan.
- Repayment timing: monthly, quarterly, half yearly or annual, and with some lenders a tailored schedule that skips the months with no income.
- Balloon: optional. Set it against what the machine will realistically be worth when you plan to trade it, not against the repayment you would like to see.
- Deposit: not always needed for established operators. A trade-in usually counts toward it.
- Structure: a chattel mortgage is the most common, with finance leases and rentals also available. The GST and tax treatment differs between them, so run it past your accountant. See chattel mortgage, lease or rental.
- Paperwork: low doc options exist for established operators on smaller amounts. Larger amounts and newer operations are usually full doc.
An example repayment
Here is how the structure changes the numbers on the same machine.
Illustrative only. A $150,000 tractor loan over five years at an example rate of 9.00% p.a., fees not included.
| Structure | Repayment | Total repaid |
|---|
| Monthly, no balloon | $3,114 a month | $186,825 |
| Monthly, $45,000 balloon | $2,517 a month | $196,028 |
| Quarterly, no balloon | $9,396 a quarter | $187,926 |
| Annual, no balloon | $38,564 a year | $192,819 |
Two things stand out. The balloon cuts the monthly repayment by about $600 but adds about $9,200 in interest, because more of the debt stays outstanding for longer. Paying once a year also costs more overall than paying monthly, for the same reason. It can still be the right call when it matches when the money comes in.
These figures are illustrative only. They are not a quote, a current rate or an offer of credit. Your rate, fees and terms depend on the lender, the machine and your circumstances. Repayments are calculated in arrears and rounded.
What we fund
Tractors and headers
New and used, from compact tractors to big headers. The big-ticket items, usually funded with a chattel mortgage.
Spray rigs and seeders
Self-propelled sprayers, boomsprays, air seeders and planters, including the guidance gear bought with them.
Farm vehicles and more
Farm utes, side-by-sides, trucks, trailers and livestock handling gear. See business vehicle finance for utes.
New or used, from a dealer, a private seller, a clearing sale or an auction. Attachments and freight bought with the machine can usually go in the same loan. More on tractors in tractor finance.
What lenders look at
Your farming history
Years on the land and the type of operation. Established operators have the most options.
Your financials
Usually tax returns and financial statements, with some lenders happy to work from BAS and bank statements.
A bad season on the books
Lenders expect farm income to move. Two or three years of returns show them the pattern rather than one year on its own, and a drought year or a poor price year is usually read in that context. Explaining it up front goes better than having it found.
Your bank's security
Many farms have a main bank holding a general security over the business's assets, often including assets bought later. A new equipment lender may need that bank's consent or a priority arrangement before it settles. It is a routine step, but it takes time, so raise it early.
The machine
Brand, age and hours. Mainstream brands with strong resale are easiest to fund, and older machinery may need a deposit.
Where you are
Rural and regional lending is a specialty for some lenders and an afterthought for others. We know which ones take it seriously.
Farm equipment finance questions
Repayments and tax
Can I get seasonal repayments on a tractor loan?
Often, yes. Some lenders will structure repayments around harvest or sale periods. It depends on the lender and your records, which is why we compare.
Can repayments be made once a year?
Some lenders offer annual or half yearly repayments timed to harvest or sales. It usually costs a little more in total interest than paying monthly, because the balance comes down more slowly.
What if we have a poor season during the loan?
Talk to the lender early. Many have a process for varying repayments when a season goes badly, and a change agreed before a payment is missed is far easier than one after.
Can I claim the GST?
If the business is registered for GST and uses a chattel mortgage, it can generally claim the GST on the purchase price. Your accountant should confirm how it applies to you.
Buying the machine
Can I finance used farm machinery?
Yes. Used tractors, headers and implements are funded regularly. Age and hours matter, and some lenders cap the machine's age at the end of the term.
Can I buy at a clearing sale or auction?
Yes, but get approved before the sale so you know your limit. The lender will need the invoice or proof of sale afterwards.
Do I need a deposit?
Not always. Established operators can often fund the full price, and a trade-in counts as a deposit.
Can several machines go on one loan?
Often, yes, when they are bought together. If you are buying over a season or two, some lenders offer an approved limit you can draw on for each purchase.
Can I refinance machinery I already own?
Some lenders will lend against machinery the business already owns, which can free up cash for the season. It depends on the machine's age, hours and value, and on any security your bank already holds. See refinancing.
Your operation and your bank
Do I need to own the farm or the land?
No. The finance is secured against the machine, not the land. Lessees, sharefarmers and contractors can be approved too, with the lender looking at the operation's income and history.
Our bank holds security over the farm. Does that matter?
It can. If the bank's security covers the business's assets, including ones bought later, the new lender may need the bank's consent or a priority arrangement before it settles. It is routine, but start it early so it does not hold up the purchase.
The bank said no. Is that the end of it?
Not necessarily. Banks are one part of the market, and some specialist and non-bank lenders take a different view of farm income, older machinery or a bad season. We compare the lenders on our panel to find the ones that fit.
Can I finance a machine for my contracting business?
Yes. Contractors are assessed as a business, on contract income and how steady the work is. The machine itself is assessed the same way it would be for a farmer.
Is a hobby farm treated the same?
Not usually. If the block is not run as a business, the finance is generally a personal loan, assessed on your personal income rather than the farm's.
Moving machinery or stock around? Trailer finance covers plant and stock trailers. For everything else, see equipment finance.
Buying farm land or a rural property rather than machinery? That is a different kind of loan, secured on the land itself. See buying a farm or rural property, or call us on 1300 267 273 to talk it through.
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