“Nothing runs like a Deere,” according to an old tagline for the world’s largest farm equipment maker, and nothing lends like a Deere, either, says the Wall Street Journal. The company, which lends billions of dollars to farmers who buy its equipment, “is providing more short-term credit for crop supplies such as seeds, chemicals and fertilizer, making it the No. 5 agricultural lender.”
Lending by Deere is a boon to growers, who face rising interest rates on bank loans and a more rigorous examination of credit-worthiness as the commodity-price slump continues. The lending also generates income for Deere “during the worst market for machinery sales in more than 15 years,” says the Journal. Deere also has expanded its equipment leasing program, an option for farmers who don’t want to buy during lean times.
“Deere said it is responding to greater demand for leased equipment from farmers and for short-term credit from other farm-industry manufacturers such as seed companies that are offering aggressive financing through Deere as a sales incentive,” said the Journal. The value of equipment leases is up by 87 percent since 2013, when the commodity boom ended while loans on farm equipment purchases are down by 10 percent since 2014.