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Flexible farm financing plays role in risk management
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Your New Holland dealer and CNH Capital can help
There's no doubt about it: farming is risky business. Producers operate in a dynamic policy and economic environment. Add the uncertainties of weather, yields, and commodity prices, and it's easy to see why farm and ranch businesses are so vulnerable.
To properly manage risk, farm managers must be highly skilled and knowledgeable in production, and keep up with emerging production methods. Today's farmers and ranchers also have many complex financial decisions to manage changes in income, cash flow, input costs, and interest rates.
That's why risk management is such an important aspect of farming. It involves choosing among alternatives that reduce the financial effects of risk.
There are a number of ways to manage the financial risks associated with farming. As with most businesses, one of the most effective strategies is to diversify by using a number of financing sources. But for most farmers, this represents a departure from the traditional approach of a bank loan that covers a farm's total financing needs. Because such loans are tied to the operation's total business assets such as real estate and equipment, it's a high-risk approach that's best avoided. |
"Once we get a snapshot of the
business, we have an opportunity to provide the best service and products."
—Troy Price |
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CNH Capital gives farmers and ranchers the opportunity to diversify financing sources by offering financing options for purchasing, maintaining and protecting farm equipment. Specific financing products are diversified across a farm operation — and kept separate from real estate and operating loans.
Professional, local service
Of course, there's more to CNH Capital than a wide array of finance and insurance products. Customers also rely on professional service and advice from their local New Holland dealer.
"We're the industry experts, so we understand the risks involved in farming."
—Bill York |
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That's why New Holland dealers work closely with CNH Capital's field sales force to help farmers come up with the financing products that best fit their operations. Dealer personnel, trained by CNH Capital's field support organization, are well-prepared to offer one-on-one consultations with customers and make recommendations.
"Once we get a snapshot of the business, then we have an opportunity to provide the best service and products," says Troy Price, Vice President of Ag Financial Services for CNH Capital. For example, the dealer might look at the equipment's estimated hours of use to determine the right financing vehicle, such as lease versus buy. Payments can be adjusted to fit an operation's projected cash flow.
In addition, CNH Capital provides New Holland dealers with the tools and training to develop multiple scenarios and payment options for customers to consider. After all, these are difficult choices that directly impact a farm's bottom line.
"We can offer more flexibility, because we know the equipment and what it will sell for," says Price. "Then we put together the best package for the customer." |
The company's goal is to offer flexible financing products that align with a farm's requirements, and to back those products with outstanding service provided by the New Holland dealer's local financing experts. And when disaster hits? "We're the industry experts, so we understand the risks involved in farming," says Bill York, Senior Vice President of Shared Services for CNH Capital. "We can be very flexible, because we understand this business."
CNH Capital offers a variety of financing tools to help agricultural producers conserve capital and enhance cash flow. Now is a great time to visit your local New Holland dealer to ask about these and other great financing options from CNH Capital
- One Simple Rate*: A fixed rate, as low as 6.50% APR for up to 60 months on new TG Series tractors, now through the end of the year.
- Split Rate*: 0.9% APR for 36 months followed by 6.9% for 36 months on all new models of TM Series and TG Series tractors, now through the end of September.
- Operating Lease*: Low upfront payments to conserve capital on all new models of TM, TG and TS Series tractors.
Boost your productivity and capacity while holding down costs. Visit your New Holland dealer today!
*See your New Holland dealer for details. Financing is available for credit qualified customers through CNH Capital America LLC, in the U.S., or CNH Capital Canada Ltd. in Canada ("CNH Capital"). Standard CNH Capital terms and conditions apply. CNH Capital reserves the right to cancel any program without notice. EXAMPLES: Based on a retail contract date of September 15, 2005, with a suggested retail price on a new model TG210 of $127,000.00, customer makes a down payment of $29,184.25 and finances the balance of $97,815.75. 0.9% APR Financing: Offer is good through September 30, 2005, at participating New Holland dealers in the United States and Canada. The interest rate will be 0.9% APR for 36 months followed by an interest rate of 6.9% APR for 36 months for a total contract term of 72 months. There will be three equal annual installments of $16,820.00 each, the first due September 15, 2006, followed by three equal annual installments of $18,852.37 each, the first due on September 15, 2009. The total amount payable will be $136,201.36, which includes finance charges of $9,201.36. Some administrative fees may apply. 6.5% APR Financing: Offer is good through December 31, 2005, at participating New Holland dealers in the United States and Canada. There will be three equal annual payments of $23,537.85, the first due on September 15, 2006. The total amount payable will be $146,873.47, with finance charges of $19,873.47. Some administrative fees may apply. |
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Flexible Financing Solutions
Just as farmers have tools for farming, CNH Capital offers tools for risk management. CNH Capital offers a broad range of flexible financing solutions for farmers, including equipment loans and leases, input loans, revolving credit lines and insurance—all sold and serviced at local New Holland dealerships: |
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Loans / leases. Equipment loans and leases that aren't tied to real estate loans are a great way to diversify funding. CNH Capital offers multiple loan options, with flexible terms designed to fit an operation's projected cash flow. The company also works closely with New Holland to offer very attractive terms on specific equipment. Beginning this month, CNH Capital also will expand its input financing business.
Revolving credit. CNH Capital's dedicated line of credit can be used at
New Holland dealerships for parts and service, to keep farm equipment in peak running condition. This becomes another great risk management tool. CNH Capital and New Holland offer outstanding savings to its cardholders. In addition, a separate credit line means farmers can maintain higher equity in real estate assets, giving them more flexibility in making production decisions.
Insurance. CNH Capital's insurance products help farmers manage risks by offering affordable, low-risk insurance in a high-risk environment. Enrollment is easy, coverage is comprehensive, and farmers can finance premiums along with farm machinery on the equipment loan.
Asset management. As the equipment experts, CNH Capital not only knows the value of farm equipment, but it offers the industry's most comprehensive resource for remarketing used equipment nationwide. As a result, equipment retains its value, that value is known, and risk is minimized. |
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