FAQ (Frequently Asked Questions)

Q. Which program is better? Leasing or Purchasing?

A. First of all, program comparisons are only valid if a person can truly qualify for a variety of financing options. We shall assume that a person can qualify for both programs. While both programs accomplish somewhat the same goal of obtaining additional equipment or animals, they are very different. In many cases, it may easier to qualify for a lease rather than a loan. Because it might be easier to qualify, the cost may be slightly higher. On the other hand, purchase money financing can be less costly than its leasing relative, but more difficult to qualify. In addition to qualifying and cost, there may be tax consequences, both good and bad with each of the two options. Since each applicant’s situation is different, we recommend that they consult with a tax professional to discuss their options.

Q. Do I have to purchase my animals from a specific seller?

A. No. Remember you have been approved for your financing based on your abilities as a dairyman. We are not going to have that input into your decisions. We will assist you in locating animals if asked, but the final decision will be yours. We want to be your financial partner, not your operational partner.

Q. When will my first payment be due?

A. Generally, your first payment will be due in about 60 days from delivery of the animals. In the event that you are purchasing springing heifers, we will work with you to try and accommodate a reasonable time frame for your first payment.

Q. Can I pay off my note early?

A. Short answer, Yes. There are two answers to that question, because the “note” might be an actual note or a lease. If it is a note, in most cases, you can pay it off without a prepayment penalty. If it is a lease, normally the full amount of the payments must be made in order to complete your contract. Usually, it does not result in any dollar savings by paying a lease off early. There are exceptions to each of these scenarios and in most cases it will depend on the final conditions of the actual note/lease.

Q. How quickly can I get approved and get my animals?

A. Normally, we can get approval and make a site visit within 2-3 weeks. Unfortunately, that is under the most perfect conditions. Most often, the single thing that holds the process up is missing or incomplete information. We find that many times, applicants have not assembled and submitted all of the information that is required for the approval process. We recognize that all of our applicant/clients are excited about the prospect of their new venture, but they must understand that we only ask for the information that we need to process their request. But, what we ask for is information that we must have in order to fairly evaluate their request. The number 1 reason for delay in a credit decision is missing information from the applicant. We recommend that an applicant assemble all of the required information before submitting anything. Coordinate your efforts with your representative and you can be sure that your complete package will be processed as quickly as possible. Upon approval and signing of your loan documents, you may immediately begin your search for your new animals.