Equipment financing is a crucial step in the process of bringing home the machinery that will make a difference to your operation.
How that financing is secured has evolved and reflects how technology has become more integrated into decision-making across the agriculture industry.
We conducted a survey in partnership with DTN/Progressive Farmer to ask readers how they finance farm equipment and found that 86% of farmers were willing to originate a loan online, yet less than 1% of loans actually originated from a digital source.
This disconnect indicates the ag equipment industry is primed to adopt digital ag financing and deliver a more accessible, streamlined experience to buyers.
Three industry experts weigh in on this topic from a panel discussion with Brownfield Ag News. They are:
Representing the technology, finance, and machinery industries, these experts outline five reasons why online ag equipment financing is growing and the benefits inherent to the digital process.
Accelerated by the COVID-19 pandemic, is a growing expectation from customers that business decisions be available online. Just as searching for equipment and bidding in auctions have done, ag financing is responding to a demand for a digital process too.
“Today, 95% of farmers are searching for equipment online and continue to want to do business online,” says Kyle McMahon, CEO and Founder of Tractor Zoom. “That’s transformed and accelerated because of COVID. The adoption has grown more quickly, and now we’re starting to see other parts of agriculture operate more digitally.”
The precedent to integrate into a digital platform isn’t only due to the effects of the pandemic. Kelly Miller, Director of AgTech Financing for Compeer Financial, saw the trend begin in 2017.
“At that time, we really started noticing things were happening outside of the farmhouse, the machine shed, or in our offices. Our clients were making buying decisions online,” Miller says.
The goal to show up where clients need is now inclusive of a digital environment.
Estimate your equipment loan payment with Tractor Zoom.
Offering business processes digitally, in person, and a hybrid of both enable customers to complete the purchasing journey on their own terms.
“A lot of our loan types are available online, but we also impart our financial expertise and reach out to those clients and help them understand what’s next,” Miller says. We can have a conversation and establish a relationship, even though that looks different than it did just a couple of years ago.”
In some cases, an additional personal touch from a lending institution like Compeer Financial helps reassure buyers they’re making the right decision.
In others, the ability to secure pre-approval, receive customized quotes, and select a lender online delivers a more efficient and independent process for buyers to do on their own time.
Finding equipment online, anywhere, is easier than ever and more important than ever, given the availability of equipment is more limited due to the effects of supply chain issues in recent years.
“We continue to hear from the market, whether they be dealers or auction companies, that customers are more commonly buying sight unseen in deals across the United States,” McMahon says.
Because of this, the right technology and accurate data is critical to help buyers make the best, most informed decisions. That includes machine specs, photos, market trends and value, and more.
“Buyers are putting their trust into the seller they’re purchasing that piece of equipment from,” McMahon says. “We’re interested in facilitating those transactions to create the best user experience possible for farmers and other stakeholders.”
Statistics, facts, patterns, and other characteristics of data are already the foundation for many critical aspects of agriculture already, like precision farming, crop markets, carbon marketplaces, and more.
“Data is what drives every single decision and has for the last 100-150 years,” says Niall Haughey, Founder of Graze and Director for Delta FS Limited. “In agrifinance and agritech, the amount of data that’s involved that can be available to producers and everyone else in the value chain, if and when they want it, starts to move the needle on what’s possible.”
In agriculture equipment and financing, data enables providers to build the integrated solutions that buyers need.
“Data from the agritech side will start to blend beautifully with the financial services side, and the organizations, especially on the finance side who understand that, will be the winners,” Haughey says.
Learn about the Tractor Zoom data quality standards.
When engaged in an online business process, ease of use and efficiency is key.
“Around the globe, especially in equipment across all sectors, you can standardize and streamline the process,” Haughey says. “I spoke with an equipment finance provider in the UK and…they got the flow of finance applications down to 51 minutes. That’s what can be achieved when technology is in place and trust is in place. The U.S. is unique because it’s on a completely different scale and value-chain specific.”
Tractor Zoom research also indicates that an easy, trustworthy user experience takes precedence.
While Tractor Zoom is not a lender, we’re still dedicated to helping facilitate and streamline the ag equipment financing process. Compare available finance offers online, then select a lender with the rate and terms that best meet your needs.
Our resources and partnership with technology-forward companies like Compeer Financial have enabled us to put the decision-making power back into the hands of the farmer who knows what’s best for their operation.
Learn more about your ag equipment financing options with Tractor Zoom.
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Farm Equipment Financing & LoansDiscover why ag equipment buyers are choosing Tractor Zoom as the go-to-platform for securing their next equipment loan.
Tractor Zoom is connecting farm equipment sellers and buyers faster than ever before. Finding farm equipment at auction or at a dealership has never been so easy.