Farm equipment finance: a guide to agricultural machinery finance

Getting the most out of your farm requires the right tools. Farm equipment finance helps agricultural businesses get the tractors, harvesters, attachments and other machinery they need without paying the full cost upfront. Instead, you spread the cost over an agreed term, usually with the machine itself as security. The main options are hire purchase, finance leases, asset refinance and business loans, and many providers can match repayments to your farm's seasonal income.

This guide explains how agricultural machinery finance works, the options available, what affects the cost, potential tax relief and grants fit in, and what to look for when you compare farm equipment finance companies.

What is agricultural equipment finance?

Agricultural equipment finance is a type of asset finance designed for farms, estates, contractors and other rural businesses. Because the equipment acts as security, it can be easier to arrange and more affordable than unsecured borrowing. If repayments aren't made, the finance provider can take back the equipment to recover what's owed.

You can use farm equipment finance for new and used machinery, including:

• Tractors and farm vehicles, such as tractors, telehandlers, ATVs and utility vehicles

• Harvesting equipment, such as combine harvesters, forage harvesters and balers

• Tractor attachments, such as ploughs, harrows, drills, sprayers, fertiliser spreaders and trailers

• Livestock and dairy equipment, such as handling systems, feeders and milking equipment

• Precision farming technology, such as GPS guidance and yield mapping systems

• Renewable energy, such as solar panels, biomass boilers and battery storage

Why farms use machinery finance

Farm machinery is expensive, and paying cash for it can tie up money you need for seed, feed, fuel, wages and rent. Financing spreads the cost over the working life of the machine, so you can:

• Protect your working capital for day-to-day running costs

• Upgrade sooner, so you're not relying on older, less efficient machinery

• Match costs to income, with repayments timed around harvest, milk payments or livestock sales

• Plan with confidence, with fixed repayments over a set term

• Release cash from machinery you own, through asset refinance

Types of farm machinery finance

Each type of finance handles ownership, monthly costs and end-of-term options differently.

Hire purchase

Hire purchase is one of the most common ways to finance farm machinery. You usually pay a deposit, then fixed installments over an agreed term. Once you've made the final payment, you own the machine. Some agreements include a larger final payment, called a balloon payment, to keep regular repayments lower.

Hire purchase can suit farms that plan to keep machinery for most of its working life.

Finance lease

With a finance lease, the provider owns the equipment and you pay to use it for an agreed period. You're usually responsible for maintenance and insurance. At the end of the term, you can typically extend the lease, return the equipment or arrange for it to be sold. Our guide to finance leases vs operating leases explains how leases are treated differently.

A finance lease can suit equipment you'll want to replace regularly, such as technology that updates quickly.

Asset refinance

If your farm owns valuable machinery outright, asset refinance lets you borrow against it. You receive a lump sum and repay it over a fixed term, with the machinery as security. Farms often use this to fund new investments, cover a cash flow gap or consolidate other borrowing.

Farm equipment loans

You can also use a business loan to buy farm equipment. You borrow a lump sum, buy the machine outright and repay in fixed monthly installments. You own the equipment from day one. Because an unsecured loan doesn't use the machine as security, it can cost more than asset finance, but it can be useful for smaller items, private sales or anything a specialist provider won't fund.

Seasonal and flexible repayments

Farm income rarely arrives evenly through the year. Arable farms may earn most of their income after harvest, while livestock farms may have peaks around sales. Many agricultural finance providers offer repayment structures that reflect this, such as:

• Seasonal repayments, with larger payments when income comes in and smaller or no payments in quieter months

• Annual or quarterly repayments, rather than monthly

• Deferred first payments, so repayments start once the machine is earning

• Balloon payments, which lower regular repayments in exchange for a larger final payment

Not every provider offers every option, so ask about flexible structures when you request quotes. Make sure any seasonal plan still works if a harvest is late or prices fall.

How much does farm equipment finance cost?

There's no single rate for agricultural machinery finance. Each provider assesses your application and sets its own terms. Rates vary between providers and customers, so do your own research and compare offers before signing up.

The main factors that affect the cost include:

• Your farm's finances, including trading history, profitability and credit record

• The equipment, including whether it's new or used, its age and its expected resale value

• Your deposit, as a larger deposit reduces what you borrow

• The term, as longer terms mean lower repayments but usually more interest overall

• The repayment structure, as seasonal or balloon arrangements can change the total you pay

Our guide to how interest rates work explains fixed and variable rates in more detail.

Farm equipment finance companies: who offers it?

Agricultural machinery finance is available from several types of provider:

• Manufacturer and dealer finance, arranged at the point of sale, sometimes with promotional terms on new machines

• High street banks, often through their asset finance or agriculture teams

• Specialist agricultural and asset finance lenders, who focus on farm and rural businesses

• Brokers and finance marketplaces, which compare deals from a panel of lenders on your behalf

Each has its strengths. Dealer finance can be convenient, while specialist lenders and marketplaces can help you compare options across the market, including for used machinery or refinancing.

How to compare farm equipment finance deals

When you compare offers, look at:

• The total amount repayable, including interest and all fees

• The APR, so you can compare like for like

• Deposit and balloon payments, and whether you can afford them

• Repayment flexibility, including seasonal options

• Ownership at the end of the agreement

• Early settlement terms, if you might want to pay off early

• Whether used or privately sold equipment is accepted

Tax relief on farm machinery

Buying machinery can reduce your tax bill. Most farm machinery counts as plant and machinery for capital allowances, and qualifying spending may be covered by the Annual Investment Allowance, which lets businesses deduct the full cost of qualifying plant and machinery from their profits, up to an annual limit.

How finance affects this depends on the agreement. With hire purchase and loans, your business usually claims capital allowances because it owns, or will own, the equipment. With most leases, the payments are usually treated as a business expense instead.

Tax rules change and depend on your circumstances, so speak to your accountant before deciding how to finance equipment.

Grants for farm equipment

Grants can help with some farm equipment costs. In England, the Farming Equipment and Technology Fund (FETF) has offered grants towards specific equipment that improves productivity, slurry management and animal health and welfare. The 2026 round closed in May 2026, with applications of between £1,000 and £25,000. Check gov.uk and Find a grant for future rounds and other schemes.

Farms in Scotland, Wales and Northern Ireland should check their devolved government's agriculture support.

Grants are competitive and usually cover only part of the cost, and some pay out only after you've bought the equipment. Many farms use finance alongside a grant to cover the rest of the cost or the upfront payment. Check the grant's terms first, as some have rules about how the equipment is funded. Our guide to government business grants covers grants more widely. 

How to apply for farm equipment finance

Having the right information ready makes the process quicker. Providers commonly ask for:

• a quote or invoice for the machinery, including whether it's new or used

• your business details and how long you've been trading

• recent accounts, and management accounts if your filed accounts are out of date

• business bank statements

• details of any existing borrowing, including other finance agreements

Because farm income is seasonal, it helps to explain your income pattern and any seasonal repayment needs upfront. Our guide on how to apply for asset finance walks through the process in more detail.

Funding your farm equipment with Flexipay

The right machinery helps your farm work harder through every season. Through our farm asset finance marketplace, we work with a panel of specialist lenders to find deals on tractors, harvesters, attachments, farm vehicles and more.

• Borrow from £10,000 to £5 million over terms of 1 to 7 years

• Apply online in about 6 minutes, without affecting your credit score if you're a limited company or LLP

• Your dedicated Account Manager will call to talk through the options available

• Decisions are usually made within 1 to 2 days

• Borrow against machinery you already own, valued at £10,000 or more

• Explore options for Growth Guarantee Scheme backed finance through our lending partners

For costs that aren't equipment, such as stock, working capital or buildings, a Funding Circle business loan could help. For regular purchases like feed, seed, fuel and repairs, FlexiPay is a cash flow companion, credit you can flex around your business, letting you pay upfront and repay over 1, 3, 6, 9 or 12 months for a flat fee from 1.99% per transaction.

To apply, your business needs to be a UK limited company or LLP. Check your eligibility to see if your business qualifies.

Explore farm equipment finance

Farm equipment finance FAQs

What is agricultural machinery finance?

Agricultural machinery finance helps farms and rural businesses buy or lease equipment such as tractors, harvesters and attachments, and spread the cost over time. The machinery usually acts as security. Common options include hire purchase, finance leases, asset refinance and business loans.

Can I get finance for used farm machinery?

Yes, many providers finance used tractors and other farm equipment. The machine's age, hours and condition will affect the terms you're offered, and some providers have limits on the age of equipment they'll fund.

Can farm equipment finance repayments be seasonal?

Many agricultural finance providers offer seasonal, quarterly or annual repayments to match farm income, such as after harvest. Not every provider offers this, so ask when you request a quote.

What's the difference between farm equipment finance and a farm loan?

Farm equipment finance is usually secured against the machine you're buying, which can make it cheaper and easier to arrange. A farm business loan gives you a lump sum for any purpose, including equipment, stock or working capital, and is often unsecured.

Can I refinance farm machinery I already own?

Yes. Asset refinance lets you borrow against machinery your business owns outright, with the equipment as security. Through Funding Circle, you can apply to borrow against existing assets valued at £10,000 or more.

Disclaimer

01/11/26 – While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial, tax or legal advice. Readers should seek independent tax advice from a qualified professional. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.