Horticulture and forestry equipment finance

How do growers and forestry contractors finance equipment?

Commercial growers, nurseries and forestry contractors typically use hire purchase for tractors and general forestry machinery, which hold value well and are kept for years, and consider leasing for polytunnel and glasshouse control technology, where automation and climate control systems improve quickly. Because income in this category is heavily seasonal, tied to growing and planting seasons, machinery needs to be funded and in place before the season starts rather than once the cash from the previous one has come in.

Buyers are commercial growers, nurseries, landscaping businesses and forestry or arboriculture contractors, most of whom operate on a seasonal cycle where income is concentrated into a few months of the year rather than spread evenly. Tractors, mulchers, chippers and polytunnel or glasshouse structures typically need to be in place ahead of the growing or planting season, which means the equipment has to be funded before the season's income has actually arrived, making finance a practical necessity rather than a preference for most of this category.

Hire purchase fits tractors and general forestry machinery well, since these assets have a long working life and a business generally wants to own and keep using the same machine for years. Leasing is worth considering for polytunnel and glasshouse control technology, such as automated ventilation and irrigation systems, since these improve steadily and a grower who owns outright can be running noticeably less efficient control systems than a competitor on a shorter refresh cycle.

Tractors and general forestry equipment have a decent used market, drawing buyers from across agriculture and forestry, which keeps lenders comfortable financing both new and used machinery in this category. Bespoke growing structures and site-specific control systems are harder to resell, since their value is tied closely to the site they were built for, so lenders lean more on the trading history of the business for this kind of equipment.

The mistake we see most often is sizing repayments to an average monthly income figure rather than the genuinely seasonal pattern of the business, when many lenders will structure seasonal or deferred payments to match the growing calendar if this is discussed and agreed before the finance agreement is signed rather than requested afterwards. Bringing at least a season or two of trading figures to that conversation makes it considerably easier for a lender to agree a realistic schedule.

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