Leasing haying equipment is considered to be one of the best options for many farmers as it eliminates purchasing it completely and allows using the fresh machines. However, in order to tap the full potential of the haying equipment leasing it is exceptional important to undertake the leasing with proper strategies on mind. This knowledge, therefore, helps you to determine the factors that can affect the value of your lease so as to exploit this financial form of business. Hiring haying equipment can indeed be valuable to your business but it is even more valuable if you follow the following tips that will help you get the most out of the lease.
1. Make the Right Choice
First and the foremost check to optimize the value of haying equipment lease is the machinery that you decide to lease. Leasing allows getting an access to the qualitative and up–to–date equipment without the need to own it. But here it is crucial to decide on equipment that corresponds to the scale of the farm and its functioning.
- Assess Your Needs: The size of the farm, the amount of hay you plan to supply and the many types of ground that you will traverse should also come into consideration. These factors will assist you to identify the kind and capacity of the equipment needed.
- Stay Updated: Leasing provides a way of being able to access a new technology in a relatively cheaper way. Intensify the focus on innovations and trends that are taking place in the industry and purchase equipment that delivers higher efficiency rates and better fuel economy, as well as is equipped with secure features.
2. Understand the Lease Terms
To maximize on the benefits derived from haying equipment lease, one needs to take his/her time and appreciate every clause in the lease agreement. This comprises of understanding what is comprised in the lease agreement, term of the lease as well as any extra charges that may be involved.
- Lease Duration: With regard to the lease term select a lease period which is convenient within your haying season and operational calendar. Short term leases are suitable when the equipment will be used for a specific session only; long term leases are cheaper and convenient as equipment can be used on a continuous basis.
- Inclusions and Exclusions: Also, it is necessary that you should know what is included in the rent lease. Some contracts may contain terms of maintenance, repairs and insurance among other things while others may make you to meet these costs. This information, however, is critical in reminding you that some issues you may not have contemplated may cost you a lot of money or even bring work to a halt.
3. Maintain the Equipment Properly
As is known, equipment leasing entails risks and these risks impact the value of the leased equipment in the following ways; To get the highest value from any leased equipment, proper maintenance must be considered. As for repairs, leasing mostly transfers them to the leasing organization, however, maintenance of vehicles is mainly the lessee’s task. Maintaining the equipment in good road condition also helps in its effectiveness when used besides preventing the occurrence of damages which attract some penalties at some end of the lease period.
- Follow the Manufacturer’s Guidelines: Keep strict to the maintenance schedule that the manufacturer of the equipment advises on. Some of the services are; oil change, filter replacement and checking on the vehicle.
- Document Maintenance Activities: Maintain proper records of all the exercise that is being conducted. It may be useful in cases whereby there is disagreement on the state of the equipment when it is being returned by the leaseholder at the end of the lease period.
4. Negotiate the Lease Terms
Same with the haying equipment, however one may negotiate the terms of the lease to fit one’s preference. Leasing companies may be somewhat rigid and their contracts somewhat rigid but there is usually leeway for bargaining.
- Lease Flexibility: Negotiate for more openness especially with the period of lease or ways to terminate the lease agreement early. This can be very useful for the farming especially when the farming needs change, or when planning to upgrade or scale down your operation.
- Payment Structure: One of the most important terms would be to request for payment term that will suit your cash flow. Depending on farming practices, which is whether farmers usually receive their payments on seasonal basis especially during harvest seasons, some farmers may have reduced pressure on cash flow.
5. Plan for the End of the Lease
When your lease term is up, it is not really a problem since you will just shift to a new one, however, when you do not have a plan in mind, there is a tendency for you to spend more. The questions to be asked are whether you would wish to continue leasing, expand the lease, or buy the leased equipment.
- Renewal Options: In case you benefited from the equipment, consider the renewal procedures for such equipment. The leasing companies may have promotion offers on renewal of the lease at lower rates or with better models of vehicles.
- Equipment Purchase: Some of the leases come as leases with bargain which enables one to own the equipment at the end of the lease agreement. If you realize that the leased equipment is very crucial in your operations, acquiring it might be cheaper for you.
Conclusion
To maximize on the value of haying equipment leasing the following must be done with much attention; Before entering into the agreement, during signing a lease agreement and during the exercise of the leasing agreement. In order to make leasing continue being useful for your farming business, it is important to select the right equipment, maintain it properly, bargain for the right and better lease terms, and think at the right time when the lease will expire. However, when done correctly, haying equipment leasing is not only flexibility, it is also a productivity increase on your farm.