Products and Services

Farm Credit Leasing

Frequently Asked Questions


1. Why would I want to lease equipment?

Equipment leasing brings many benefits to your business – it’s an excellent way to reduce costs, improve cash flow, avoid equipment obsolescence, free up capital and maximize tax advantages.

2. What’s the difference between a lease and a loan? 

Rather than loaning you money to buy a piece of equipment, a leasing company lends the use of equipment or machinery and you pay a periodic lease rental or payment. In essence, you only pay a usage fee for the equipment as it is used rather than paying interest on a loan. Finally, you typically treat a lease differently for accounting and tax purposes.

3. What kind of equipment can I lease? 

Virtually any type of equipment, vehicles or facilities used by your organization may be leased. You can choose any make or model, new or used, available through any vendor.

4. Are purchasing discounts and selection assistance available for equipment? 

Farm Credit Leasing solutions offer one-source specification and pricing comparisons, volume purchasing discounts, equipment protection and selection assistance on transportation and material handling equipment.

5. What are my obligations for the equipment (such as insurance, taxes and maintenance) during the lease? 

You are obligated to pay the rentals in a lease, and must pay all taxes, insurance premiums and maintenance costs related to the equipment, throughout the term of the lease.

6. Can I upgrade the equipment or add equipment under an FCL lease? 

Yes. In fact, the ability to easily upgrade equipment is one of the major business advantages of leasing. With an FCL lease, you can set up a new contract to meet any upgrade needs. One or more of the components of the lease may be adjusted including term, residual and rental payment to account for the cost of the upgrade and the additional life of the upgraded leased asset.

7. What costs would I incur before the lease ends? 

Generally, you are responsible for the lease payment plus operating costs, such as maintenance, sales and property taxes, license, registration and insurance. There is occasionally a special usage fee built into the lease for certain types of equipment. This usage fee is agreed upon with our customer at the beginning of the lease term.

8. What happens if I want to change my lease or end my lease early?

We handle changes and early terminations on a case-by-case basis. An FCL lease is non-cancellable; therefore, you are fully obligated to make all payments under the lease over the entire lease term. However, we will work with you to make changes and terminations that your business requires.

9. What happens to the equipment at the end of the lease? 

At the end of the lease, you can purchase the equipment, return it or renew the lease. All FCL leases have end-of-lease purchase options, which vary depending on the type of equipment. 

10. What procedures must I follow if I choose to return the equipment at the end of the lease?

Simply notify us 90 days prior to the end of the lease term (or as indicated in the lease documents) that you will be returning the equipment. You should inspect the equipment to ensure that its condition is the same as when the lease was initiated, excepting normal wear and tear, and make any necessary repairs. Then, simply deliver the equipment to a specified location.

11. Are there any extra costs at the end of the lease? 

For transportation equipment, FCL charges a remarketing fee based on a terminal rental adjustment clause (TRAC). Otherwise, there are no fees charged at lease end, provided the equipment is returned in the condition as stated in the lease.

12. Why should I choose an FCL lease? 

FCL is focused on meeting the special needs of the nation’s agricultural producers, agribusinesses and rural communications and energy companies. We understand your business, our rates are competitive and our terms our flexible.

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