As you get ready to buy your inputs for the 2018 season, you may be considering financing options that will let you pay for your purchases on a schedule that fits your financial needs. Financing can be a great way to let you purchase now and match payments to your cash flows, but it’s important to make sure you look at all aspects of financing offers before choosing one.
You'll want to consider things like rate, term, and whether or not financing is restricted to specific products or bundles.
Terms to Know
Understanding the basic terminology of financing will help you understand what you’re looking at as you make your decision.
- Annual Interest Rate: The rate paid if a loan was carried at that rate for a full 12 months. Sometimes rates can change over the term of your loan; make sure you’re comparing rates over the time period you plan to keep the loan.
- Term: Length of the loan
- WSJ PRIME Rate: The Wall Street Journal surveys 30 large banks about their current prime rate, which is the rate at which they lend money to their qualified customers. (Source: Bankrate) The PRIME rate is then used by many financial institutions to determine their rate for lending money to customers. As of January 8, 2018, the PRIME rate is 4.50%.
- All-In Price: This is the fully loaded cost of a product, including the financing cost.
When comparing financing options, it’s important to look at things like rate and term to get a true idea of which program will work best for you. Think about when you’ll be ready to pay for your inputs and calculate the overall cost of what you will pay between the time you purchase and the time you’ll be paying. You should also check to see if financing is available on all products and if you have to bundle specific products to be eligible.
Extended Terms from FBN Direct™
Our extended terms financing was designed to fit the timing needs of a farmer while also offering competitive rates.
If you purchase on extended terms with FBN Direct by January 12, 2018, you’ll pay $0 at the time of your purchase. You’ll then pay 0% interest--meaning no interest at all--until May 1, 2018. If you’re ready to pay at that time, you’ll never pay any interest. However, your terms go the whole way until December 1, 2018. From May 1 until December 1, you’ll pay a PRIME+2% interest rate, meaning that your rate will be based on whatever the PRIME rate is during that time period.
Your payment will be due in full on December 1, 2018. These rates and terms are product neutral, meaning you can use them on any product you purchase through FBN Direct and aren’t dependent on any sort of bundling.
Apply for up to $250,000 credit now using the streamlined, two-page FBN credit application.
FBN Direct is offered by FBN Inputs, LLC and are available only in states where FBN Inputs, LLC is licensed. Call (844)200-FARM for more info.