Tractor Finance

Monday 19th February | 14 minute read

Tractor Finance (Asset Finance) is a finance facility that enables agricultural businesses to acquire tractors through purchasing or leasing options.

Our tractor finance makes high-quality, reliable tractors more accessible and financially manageable by spreading the cost over time rather than requiring the full purchase price upfront.

Tractor finance

Our Tractor Finance service

We arrange market-leading finance leasing for tractors and agricultural machinery.

  • Market-leading rates.
  • Finance from £50,000-£1,000,000.
  • Finance Tractors, Combine Harvesters, Telehandlers, Balers and Loaders.
  • Available to companies in & England, Scotland, Wales and Northern Ireland.

Examples of Tractor Finance

Finance is available for all brands and models of tractors and agricultural machinery, enabling farmers to spread the acquisition cost over time. Typical examples include:

  • John Deere finance for Series 7, 8, and 9 tractors
  • Massey Ferguson finance for MF 3, MF 5S, MF 6S, MF 7S, MF 8S and MF8700 S tractors.
  • New Holland finance for 4710, 3230, 3510, 3037, 3032, Excel 8010, 5500 Turbo Super tractors and CR11 Combine Harvester.
  • Case IH finance for Quadtrac, Magnum, Optum, Puma, Maxxum, Vestrum, Luxxum, Farmall Series and Quantum Series tractors.
  • Fendt finance for 1100, 1000, 900, 700, 600, 500, 300, 200 and e100 Vario tractors. Fendt Cargo frontloaders, Fendt Cargo T740 and T955 telehandlers, Fendt IDEAL, C-Series, L-Series and CORUS 500 combine harvesters. We also finance Fendt's mowers, cutters, slicers, tedders, rakes, forage wagons, balers, planters and sprayers.
  • Valtra finance for F SERIES, A SERIES, G SERIES, N SERIES, T SERIES, Q SERIES and S SERIES tractors.
  • Kubota finance for M7003, M6002, M6001,M5002, M5001 narrow, M4003 tractors, R090 and R070 front loaders, RTV-X1110 and RTV-X1140 utility vehicles, RT100-2, RT150-2, RT210-2e, RT250-2. RT270-2 Wheel loaders, and the KTH4815-2 telehandlers.
  • Claas finance for XERION, ARION, AXOS, NEXOS Tractors. LEXION, TRION 700 / 600 / 500, EVION 400, TUCANO 320 Combine Harvestors. JAGUAR TERRA TRAC, JAGUAR 900, 800 Forage harvesters, Large-scale mowers, tedders, swathers, balers, SCORPION 960-732 and TORION 2014 / 1913 Loaders.

Our Tractor Finance Options

  • Hire Purchase
  • Hire Purchase with Balloon Payment
    (Business Contract Purchase)
  • Finance Lease
  • Operating Lease
  • Residual Value-Based Lease (RVBL)

The Benefits of Tractor Finance for Your Business

Tractor Finance can bring tangible benefits to farms and agricultural businesses that need to access a new tractor but don't want to use its cash reserves. Here are the top 7 reasons why companies use it.

  • Maintain cash flow
  • Access to tax relief
  • Acquire assets quickly 
  • Gain flexibility to upgrade or replace assets
  • Risk protection against fluctuations in asset prices
  • Affordable payment terms
  • Protect lines of credit and cash reserves

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2024 Tractor Finance Guide

Tractor finance (asset finance or farm finance) encompasses an array of financial solutions designed to facilitate the acquisition of tractors for individuals and businesses. By offering the opportunity to spread the cost over time, these options aim to make tractor ownership more financially manageable, avoiding the need for a significant upfront investment. Available financing methods include Hire Purchase (HP), Leasing, Operating Lease, Finance Lease, and Tractor Loans, each tailored to meet the diverse needs of the agricultural, construction, and landscaping sectors. This guide delves into each finance type, providing insights to help you determine the most suitable way to finance your tractor acquisition.


What is Tractor Finance?

Tractor finance encompasses all finance options that help an individual or business acquire a tractor through purchase or lease. These financial options are tailored to make acquiring tractors more accessible and financially manageable for those in the agriculture, construction, and landscaping sectors, among others, by spreading the cost over time rather than requiring the full purchase price upfront.

Tractor financing options include Hire Purchase (HP)Leasing, Operating LeaseFinance Lease and Tractor Loans. Let's look at each financing option available to farmers and agricultural businesses in more detail.

Tractor Hire Purchase (HP)

This allows the buyer to acquire the tractor by making monthly payments over a fixed period. Ownership of the tractor transfers to the buyer after the final payment is made.

Tractor Leasing

Under a lease agreement, the lessee pays a monthly fee to use the tractor for a specified term without owning it. At the end of the lease, there may be options to purchase the tractor (typically with a balloon payment), renew the lease, or return the tractor to the lessor.

Operating Lease

It is similar to leasing but typically for a shorter term and often includes maintenance and service in the lease agreement. The tractor is returned at the end of the lease period.

Finance Lease

A finance lease is a full-payout, non-cancelable agreement wherein the lessee is responsible for maintenance and bears the risk of obsolescence. The lessee can often claim the lease payments as a business expense for tax purposes.

Tractor Loan

Some individuals or businesses take out a loan to purchase a tractor directly. The borrower owns the tractor immediately and makes loan repayments plus interest over a set period.

Balloon Payments

Some finance agreements may include a larger final payment, known as a balloon payment, which reduces the monthly payment amount during the term but requires a significant sum to be paid at the end to own the tractor outright.

Tractor finance is popular because it allows acquiring essential equipment without depleting cash reserves or capital, enabling better cash flow management. It also allows businesses to keep their fleets up-to-date with the latest models featuring advanced technology for improved efficiency and productivity.

What is a Tractor?

A tractor is a powerful motor vehicle designed for agricultural and construction tasks. It is characterised by its large, heavy-duty tyres or tracks and a powerful engine, enabling it to pull various farm machinery and equipment used for ploughing, tilling, planting, fertilising, and harvesting crops and hauling materials. Tractors vary in size and capacity, from compact models used in smaller farming operations to large, sophisticated machines equipped with advanced technology for precision agriculture. They can be fitted with attachments like front loaders, backhoes, and a wide range of towed or mounted implements, making them versatile tools in agriculture and construction. Modern tractors also feature cabins with ergonomic controls and often come with GPS and automation technologies, enhancing productivity and efficiency in field operations.

What other agricultural machines and vehicles can finance be used for?

Finance options are not limited to tractors and extend across a wide range of agricultural machinery and vehicles to support the diverse needs of modern farming operations. Financing helps farmers and agricultural businesses acquire essential equipment without a significant upfront investment, enabling better cash flow management and operational efficiency.

Agricultural machines and vehicles that can be financed include Combine Harvesters, Seeders and Planters, Sprayers, Tillage Equipment, Balers, Feed Mixers, Irrigation Equipment, Utility Vehicles (UTVs), Forestry Equipment, Dairy Equipment, Agricultural Drones, Livestock Management Equipment and Storage Silos and Grain Bins.

  • Combine Harvesters. Essential for efficiently harvesting crops, combines can be quite expensive, making finance options attractive.
  • Seeders and Planters. These machines ensure the precise planting of seeds at the correct depth and spacing, essential for optimal crop management.
  • Sprayers. Modern sprayers offer precision to minimise waste and environmental impact when applying pesticides and fertilisers.
  • Tillage Equipment. Ploughs, harrows, and cultivators for soil preparation can be financed to ensure soil is properly managed for planting.
  • Balers. Balers are essential for compressing cut and raked crops into compact bales for managing hay, straw, or silage.
  • Feed Mixers. These machines are used in livestock operations to mix feed ingredients to specific ratios, ensuring a balanced animal diet.
  • Irrigation Equipment. Systems for watering crops, including pivots, drip lines, and pumps, can be financed to improve water use efficiency and crop yields.
  • Skid Steer Loaders. Versatile and compact, skid steers are used for various tasks around a farm, from clearing debris to feeding livestock.
  • Utility Vehicles (UTVs). Their versatility and mobility make UTVs invaluable for transporting people and supplies across large farms.
  • Forestry Equipment. Equipment such as loggers, chippers, and sawmills can be financed for those involved in forestry management alongside agriculture.
  • Dairy Equipment. Automated milking systems, cooling tanks, and pasteurisers for dairy farms to enhance productivity and milk quality.
  • Agricultural Drones. For precision agriculture, drones can be used for mapping, spraying, and monitoring crop health from the air.
  • Livestock Management Equipment. Including tagging, feeding, and health monitoring systems to optimise livestock health and productivity.
  • Storage Silos and Grain Bins. For storing harvested grain and other crops, ensuring they remain dry and secure until needed or sold.

By offering tailored asset finance solutions, lenders enable agricultural businesses to invest in the machinery and vehicles they need to operate efficiently and sustainably. This flexibility allows for upgrading equipment in line with technological advancements and the expansion or diversification of farming operations.

What are the most important factors to users of tractor finance?

For farmers and business owners considering tractor finance, several key factors influence their decision-making process. The factors include Interest Rates, Monthly Payment Size, Deposit Payment Requirements, Total Cost of Ownership, Lease vs. Purchase Options, Term Length, End-of-Term Options, Early Termination Conditions, Flexibility to Upgrade, Approval Process and Requirements, the Finance Provider's reputation, Tax Implications and Benefits. These factors help ensure they choose the most appropriate financing solution that meets their needs, aligns with their financial capacity, and supports their operational goals.

Interest Rates. Users should prioritise finding competitive interest rates to minimise the total cost of financing over the loan or lease term.

Monthly Payment. Affordable monthly payments that fit within the user's budget are crucial. Users seek to balance manageable payments with the overall cost of financing.

Deposit Payment. The size of the down payment can significantly impact upfront costs. Users often prefer lower down payments to preserve cash flow, though this may affect the overall financial terms.

Total Cost of Ownership. Users consider not just the monthly payments and interest but also the total cost over the life of the finance agreement, including maintenance, insurance, and any potential tax benefits.

Lease vs. Purchase Options. Deciding whether to lease or purchase impacts financial planning and asset management. Users evaluate the benefits of ownership against the flexibility and potentially lower upfront leasing costs. Aspects like maintenance will add significant costs to the total cost of ownership, which will instead be included if leasing the tractor.

Term Length. The duration of the finance agreement affects both the monthly payments and the total interest paid. Users seek terms that offer an optimal balance between affordable payments and minimising total finance costs.

End-of-Term Options. The options available at the end of the term (e.g., buying the tractor, returning it, or renewing the lease) are significant considerations for leases.

Early Termination Conditions. Understanding the costs and conditions of terminating the finance agreement early is important for flexibility and financial planning.

Flexibility to Upgrade. The ability to upgrade to newer models or equipment before the end of the finance term is valued, especially for users looking to keep pace with advancements in agricultural technology.

Approval Process and Requirements. The ease of the application process, speed of approval, and documentation required can influence the choice of finance provider. Users often prefer straightforward and efficient processes.

Reputation and Reliability of the Finance Provider. Working with a reputable and reliable finance provider ensures fair terms, good customer service, and support throughout the agreement.

Tax Implications and Benefits. Users consider the potential tax implications and benefits of different financing options, including deductions for interest payments or depreciation, which can affect the overall cost-effectiveness of the finance solution.

By carefully considering these factors, users should select a tractor finance option that best suits their operational requirements and financial strategy. This ensures they can acquire the necessary equipment to support their agricultural activities effectively.

How Does Tractor Finance Work?

Tractor finance allows individuals or businesses to acquire tractors without paying the full purchase price upfront. This 13-step process is designed to make tractors more accessible by spreading the cost over time, making it easier for farmers and agricultural businesses to manage their cash flow while still acquiring the necessary equipment. The typical 13 steps involved in tractor finance are listed below.

Step 1: Assessment of Needs

Determine the specific requirements for the tractor, including size, power, and additional features needed for your agricultural operations.

Step 2: Research Finance Providers.

Look for financial institutions, specialised agricultural lenders, or equipment dealers that offer tractor financing options.

Step 4: Compare Finance Options.

Evaluate the different types of finance available, such as Hire Purchase, Finance Lease, Operating Lease, or Loan. Consider the terms, interest rates, repayment schedules, and tax implications.

Step 5: Prepare Financial Documentation.

Gather necessary financial documents that demonstrate your ability to repay the finance. This may include business financial statements, tax returns, and proof of income.

Step 6: Apply for Finance.

Submit a finance application to the chosen provider, including the financial documentation and details about the tractor you wish to finance.

Step 7: Approval Process.

The finance provider will review your application, perform a credit check, and assess your financial stability to determine if you qualify for the finance.

Step 8: Receive Finance Offer.

If approved, the finance provider will present an offer outlining the finance terms, including the interest rate, monthly payment amount, term length, and other conditions.

Step 9: Review and Accept Offer:

Carefully review the finance offer. Consulting with a financial advisor will ensure favourable terms align with your financial strategy.

Step 10: Sign the Finance Agreement.

Once you agree to the terms, sign the finance agreement to formalise the arrangement with the provider.

Step 11: Acquisition of Tractor.

The finance provider will facilitate the tractor purchase on your behalf, according to the terms of the agreement. Sometimes, such as with a loan, the funds may be released directly to you to purchase the tractor.

Step 12: Make Regular Payments.

Begin making regular payments to the finance provider as per the agreement. This could be monthly, quarterly, or as otherwise specified in your contract.

Step 13: End of Term Options.

Depending on the type of finance chosen, you may have several options at the end of the term, such as making a final balloon payment to own the tractor outright, returning the tractor (if it's a lease), or refinancing to keep the tractor.

By following these steps, individuals and businesses can navigate the process of tractor finance, ensuring they secure the necessary agricultural equipment in a financially manageable way.

What are the disadvantages of tractor finance?

Yes, there are several disadvantages associated with tractor finance that individuals and businesses should consider before entering into a financing agreement, including Interest Costs, Long-Term Commitment, potential Ownership Delays, Tractor Depreciation, Maintenance and Repair Responsibilities, Usage Restrictions, Asset Liability and Credit Impact.

Tractor Finance Interest Costs

Financing a tractor means paying interest on top of the principal amount. Over time, this can significantly increase the total cost of the tractor compared to paying for it outright. Interest rates are typically affected by the size of the finance and its duration (term). The longer you take out the finance, the higher the interest rate. The higher the finance value, the lower the interest rate. With Asset Finance, shorter-term, high-value finance attracts lower interest rates.

It's a Long-Term Commitment

Finance agreements lock you into a long-term commitment, affecting your cash flow and financial flexibility.

Different Finance Options Cause Ownership Delays

With certain finance options like leasing, you don't own the tractor until the end of the agreement or until you decide to purchase it outright, potentially after a balloon payment.

Tractors Depreciate Over Time

Tractors depreciate over time. If you purchase the tractor at the end of a finance lease, the value of the tractor may be significantly less than the total amount paid throughout the lease term. For example, farm tractors depreciate by approximately 6-18% annually. In the first year of ownership, a £100,000 tractor will lose £6,000-£18,000 through depreciation.

Early Termination Penalties Exist For Some Finance Options

If circumstances change and you must exit the finance agreement early, you may face substantial penalties or fees.

Maintenance and Repair Responsibilities

Depending on the type of finance agreement, you may be responsible for all maintenance and repair costs, which can be considerable for tractors.

Usage Restrictions

Leasing agreements may restrict how you can use the tractor, including mileage or operational hours limits, which could impact your ability to use the tractor as needed.

Asset Liability

For loans secured against the tractor or other assets, you risk losing the asset if you fail to make payments.

Credit Impact

Taking out finance affects your credit score and borrowing capacity. Failure to meet repayment obligations can negatively impact your credit rating.

Tractor finance offers a practical way to acquire essential agricultural equipment without a significant upfront investment, but it does come with potential disadvantages. Weighing these up against the benefits will help you decide which finance best suits your needs and challenges. It's important to carefully review the terms of any finance agreement and consider your financial situation and long-term needs before committing.

8 Popular tractor makes that can be financed in the UK

Detailed sales data for specific tractor models in the UK is not widely published due to the competitive nature of the industry and the confidentiality of sales figures by manufacturers. However, based on industry trends, popularity, and brand reputation, several tractor models and brands are highly regarded and widely used in the UK agricultural sector. These include John Deere, Massey Ferguson tractors, New Holland, Case IH, Fendt, Valtra, Kubota and Claas. Let's take a look at each make.

John Deere Tractors

John Deere is a leading agricultural machinery market brand known for its innovation and quality. Models like the John Deere 6M, 6R, and the more compact 5 series are popular among farmers for their reliability, advanced technology, and versatility.

Massey Ferguson Tractors

Massey Ferguson tractors, such as the MF 5700 and MF 7700 series, are liked for their durability, performance, and ease of use. They offer various models suitable for farming operations, from smallholdings to large-scale agricultural enterprises.

New Holland Tractors

New Holland tractors, including the T5, T6, and T7 series, are praised for their fuel efficiency, comfort, and powerful performance. These tractors suit various tasks, from crop cultivation to livestock farming.

Case IH Tractors

Case IH offers robust tractors known for their power and efficiency. Models like the Maxxum, Puma, and Magnum series are popular for their advanced features and ability to handle demanding agricultural tasks.

Fendt Tractors

Fendt is renowned for its high-tech tractors that offer exceptional performance, comfort, and precision farming capabilities. The Fendt 700 Vario and 900 Vario series are among the preferred choices for farmers seeking premium tractors with the latest technology.

Valtra Tractors

Valtra tractors are known for their customisation options, durability, and user-friendly interface. The N, T, and A series cater to various agricultural needs, offering versatility and reliability.

Kubota Tractors

Kubota's range, including the M Series, is well-liked for its compact and utility tractors. Due to their manoeuvrability and efficiency, these models are ideal for smaller farms, landscaping, and speciality farming needs.

Claas Tractors

Claas offers a range of tractors known for their innovation and quality. The Arion and Axion series are particularly noted for their comfort, performance, and technology, making them suitable for various agricultural tasks.

These brands and models are among the most popular in the UK. Still, the best choice for a particular farm or agricultural operation will depend on specific needs, including the type of farming, size of the operation, and budget. It's always recommended to consult with dealers and other farmers and, if possible, test drive multiple models before purchasing to ensure the tractor meets your requirements.

What are the alternatives to tractor finance?

Alternatives to tractor finance offer different ways to acquire or use a tractor without committing to a traditional finance agreement. These alternatives can provide flexibility, potentially lower costs, or different ownership structures that might better suit certain businesses or individual needs. Here are some notable alternatives:

Outright Purchase. Using existing capital to buy a tractor outright eliminates interest payments and finance-related fees, immediately giving the buyer full ownership. This option is ideal for those with sufficient cash reserves who prefer not to have monthly payments. For those with savings set aside, using these funds for a tractor purchase avoids the need for external financing. This option requires careful consideration of the impact on personal or business finances, but it is the cheapest option for owning a Tractor. 

Trade-In. Trading in an older model tractor as part of the payment for a new one can reduce the overall cost. Dealers commonly offer this option and can simplify the transition to a newer model.

Rental. Renting a tractor for a specific period or seasonal work can be a practical solution for those with occasional needs. It avoids long-term financial commitments and is ideal for short-term projects or peak season requirements.

Bridging Loans. For farmers and agricultural business owners who need urgent short-term finance and own land or property, a bridging loan can help. Bridging loans can be arranged in as little as 3 working days and can be used to purchase any type of farming equipment, such as tractors, combine harvesters, loaders and balers.

Shared Ownership or Co-ops. Joining a cooperative or entering into a shared ownership agreement with other farmers can spread the cost and usage of a tractor. This approach can provide access to higher-quality or more advanced equipment that might be too expensive to purchase individually.

Government Grants and Subsidies. In the UK, government programs offer grants, subsidies, or low-interest loans to support agricultural businesses. These programs can provide financial assistance for purchasing tractors and other essential equipment.

Each alternative has advantages and considerations, ranging from the total cost and flexibility to the impact on cash flow and tax implications. Evaluating each option carefully, considering both short-term needs and long-term financial health, is essential before deciding the best way to acquire a tractor for your farming operations.

Is Tractor Finance right for me?

By breaking down the nuances of Hire Purchase, Leasing, Operating Leases, Finance Leases, and Tractor Loans, this guide aims to empower business owners in the agricultural, construction, and landscaping sectors with the knowledge to choose the most fitting financial solution.

Whether the goal is to preserve capital, manage cash flow, or access the latest tractor technology, understanding these financial products is crucial for making informed decisions that align with operational needs and financial strategies.

We're financial experts who arrange asset finance for business owners, securing you the best rates and terms from over 200 UK lenders, including private equity firms, investors and family offices.

Get expert assistance today, we're on hand to answer any questions about asset finance.

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