Leasing versus financing can look like a simple math problem until you’re the one trying to protect working capital, keep payments aligned with harvest income, and still upgrade equipment when technology changes overnight. We sit down with Logan Dowdy, Chief Credit Officer at River Valley AgCredit, to lay out the practical differences between a farm equipment loan and an agricultural lease, without the fluff and without pretending there’s a one size fits all answer.
We talk through what “ownership” really means for your operation, then get specific on the big questions producers ask us every year: How do lease payments work? What is a residual value and why does it matter? Why are many leases due at signing when a traditional annual payment might not be due for a year? Logan also explains technology obsolescence in modern agriculture and why certain machines, like sprayers and spreaders packed with precision ag hardware, are often better candidates for leasing when you want flexibility and frequent upgrades.
Taxes are a major part of the decision, so we dig into the basics of lease payment deductions, depreciation on owned equipment, and why you should always loop in your CPA before you choose a structure. We also cover purchase back leases, what a “dollar lease” is, and why it can behave more like a loan than people expect. Finally, we zoom out to the current environment, including higher interest rates, strong yield potential, grain market carry, and the importance of rebuilding working capital and locking in profit early so you can plan with confidence.
If you’re weighing farm equipment leasing, equipment financing, or a mix of both, hit play and then tell us what you’re wrestling with this season. Subscribe, share the episode with a farming friend, and leave a review with what you want to hear next.
