When you’re running a farm, buying machinery isn’t always about having the newest model sitting in the shed.
Sometimes, the best buy is a good second hand tractor that has plenty of work left in it. It might be the right size for the job, have a good service history and come at a price that makes more sense for your operation.
But then comes the tricky part, getting the finance.
There’s a common perception that banks don’t like financing second hand farm machinery, particularly older tractors and equipment. And depending on the lender, the age and type of equipment, that can certainly make things more difficult.
But a “no” from your bank doesn’t necessarily mean a “no” from everyone.
That’s where having someone who understands agricultural finance, and knows the lenders, can make a difference.
The Best Machine for the Job Isn’t Always the Newest
Farmers know better than most that machinery is a tool for the job.
If a well-maintained second-hand tractor can do exactly what you need it to do, there may be little reason to spend considerably more on a brand-new machine.
The same goes for headers, harvesters, sprayers, loaders and other specialised equipment.
Buying second-hand can make good business sense, particularly when you know the machinery, understand its history and are confident it will do the job you need it to do.
The challenge is making the numbers work.
Why Your Bank Might Say ‘NO’
It’s not necessarily that a second hand tractor or other piece of machinery isn’t a good asset.
Different lenders simply have different rules and appetites when it comes to financing used equipment.
One lender might have restrictions around the age of the machinery. Another might be more comfortable financing it.
And sometimes the issue isn’t the equipment at all, it could be the proposed loan structure or the lender’s appetite for that particular type of transaction.
That’s why being told “we don’t finance that” doesn’t always mean you need to abandon the purchase.
It may just mean you need to talk to someone who knows where else to look.
Where Experience Counts
Agricultural finance isn’t always as simple as filling out an application and waiting for an answer.
Every farming operation is different.
There are seasonal cash flows, existing finance, property, livestock, crops, machinery and plans for the future to consider. A machinery purchase that makes perfect sense for one farm may not make sense for another.
At RYO Finance, the approach is to understand the bigger picture first.
Based in Bunbury and working with farmers and businesses across the South West and beyond, RYO Finance brings extensive banking, agribusiness and commercial lending experience to the table.
With decades of experience in banking, agribusiness and commercial lending, the RYO Finance team understands that farming businesses don’t all fit neatly into the same box. They know the importance of looking at the bigger picture and finding a finance solution that works for the individual operation.
That sort of experience matters when you’re trying to work out where a deal fits.
It’s About Finding the Right Lender, Not Forcing the Wrong One
One of the advantages of using an experienced finance broker is access to a broader network of lenders.
Rather than taking your circumstances to one bank and hoping they say yes, a broker can look at the situation more broadly and identify lenders that may have a better appetite for the transaction.
That could be particularly important when you’re looking at second hand equipment.
The aim isn’t to find just any loan.
It’s about finding a finance structure that suits the equipment, your circumstances and what you’re trying to achieve with your farm.
Don’t Let the Finance Get in the Way of a Good Opportunity
Farmers are used to making decisions based on opportunity.
You might come across the right tractor at the right price. A piece of equipment you’ve been looking for might suddenly become available. Or perhaps you’ve found a machine that will allow you to take on more work or make your existing operation more efficient.
You don’t necessarily want to miss that opportunity simply because your usual lender doesn’t want to finance it.
Before walking away, it can be worth getting a second opinion.
RYO Finance takes a strategy first approach, looking beyond the immediate transaction to understand what you’re trying to achieve and how the finance fits into the bigger picture.
The team can manage the process from the initial discussion through to settlement, keeping things clear and straightforward along the way.
Second Hand Doesn’t Mean Second Best
A good second-hand tractor can be exactly the right tractor for your farm.
The fact that it’s already had a few years in the paddock doesn’t automatically mean it can’t be financed.
The important thing is finding a lender that is comfortable with the asset and a finance structure that works for you.
For farmers in the South West, RYO Finance combines local knowledge with extensive lending experience and relationships with a broad network of lenders.
So, if you’ve found the right piece of second-hand machinery but your bank has told you they won’t finance it, don’t assume that’s the end of the road.
It may simply be time to talk to someone who knows where to look.
Talk to RYO Finance about your next agricultural equipment purchase and see what finance options may be available.
Can I get finance for second-hand farm equipment?
Yes. Finance may be available for second hand tractors, machinery and other agricultural equipment. Lenders have different policies around the age, type and value of used equipment, so being declined by one lender doesn’t necessarily mean finance isn’t available elsewhere.
Why won’t my bank finance a second-hand tractor?
Banks and other lenders have different lending policies and appetites for used agricultural equipment. The issue may relate to the age or type of machinery, the proposed loan structure or simply the lender’s policy. An experienced finance broker can help identify lenders that may be more suitable.
What types of second-hand farm equipment can I finance?
Depending on the lender and your circumstances, finance may be available for a range of used agricultural equipment, including tractors, headers, harvesters, sprayers, loaders and other farm machinery.
Why use RYO Finance for second-hand farm equipment finance?
RYO Finance combines local South West knowledge with extensive experience across banking, agribusiness and commercial lending. The team works with a broad network of lenders to help identify finance solutions suited to the equipment, the farming operation and the client’s longer-term objectives.
