Finance Assets arranges hire purchase and leasing for UK farms, estates and agricultural businesses buying new or used tractors, harvesters, balers, sprayers and other farm machinery.
Tractor and farm machinery finance spreads the cost of a machine over 2 to 7 years, with monthly, seasonal or annual payments that can follow when the farm is paid. We are a broker, not a lender, so we compare quotes from our lender panel rather than offering one bank’s product.
Written by Marcus Wright, founder of Bolton Business Finance Ltd, in financial services since 2008 and a commercial finance broker since 2019. Last reviewed October 2026.
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The short version
- Tractor and farm machinery finance spreads the cost of a machine over 2 to 7 years.
- With hire purchase, the farm owns the machine after the final payment.
- Many agricultural lenders offer seasonal, half-yearly or annual payments to match farm income.
- Tractors and machinery from the main manufacturers hold their value, so used machines are widely funded.
- Finance Assets arranges farm machinery finance for limited companies and LLPs, and for sole traders and partnerships on agreements over £25,000.
| Item | Detail |
|---|---|
| Machinery covered | Tractors, combines, forage harvesters, balers, mowers and grass kit, cultivators and drills, sprayers and spreaders, trailers, loaders and livestock equipment |
| Terms | Usually 2 to 5 years, and up to 7 years for new, high-value machines |
| Paid upfront | Hire purchase: often a 10% deposit plus VAT, or a part exchange. Leases: usually 1 to 3 rentals in advance |
| Payment profiles | Monthly, quarterly, seasonal or annual, depending on the lender |
| New or used | Both, from dealers, farm sales, auctions and private sellers |
| Who we help | Limited companies and LLPs, plus sole traders and partnerships on business agreements over £25,000 |
Farm machinery we finance
Lenders will fund most machinery used on a working farm, provided it comes from an identifiable seller and holds its resale value.
| Machine type | Typical use |
|---|---|
| Tractors | Compact and utility tractors, loader tractors, high-horsepower and tracked tractors, plus front loaders and guidance systems |
| Harvesting | Combine harvesters and headers, forage harvesters, and potato and beet harvesters |
| Grass and forage | Mowers, tedders, rakes, round and square balers, bale wrappers and forage wagons |
| Cultivation and drilling | Ploughs, cultivators, power harrows, rollers and seed drills |
| Spraying and spreading | Sprayers, fertiliser spreaders, slurry tankers and muck spreaders |
| Handling and transport | Telehandlers, loading shovels, grain and livestock trailers |
| Livestock and dairy | Feeder wagons, bedding machines, milking and cooling equipment. See asset finance for dairy farms |
| Estate and grounds | Compact tractors, flails, hedge cutters and ride-on mowers for estates and equestrian yards |
We regularly see machinery from manufacturers such as John Deere, Massey Ferguson, New Holland, Fendt, Claas, Case IH, Kubota, Valtra, Deutz-Fahr and JCB.
Tractor finance
The tractor is the machine most farms finance first and replace most often, and it is one of the easiest farm assets to fund because the used market is deep.
- Hours matter as much as age. On a used tractor, lenders look at the hour meter as well as the year. A low-hours machine from a main dealer is the easiest to fund.
- Part exchange. An existing tractor often has strong trade-in value, which can cover the deposit on the next one. Any finance still owed is settled first.
- Loaders and guidance. A front loader, guidance system or front linkage can be funded with the tractor on the same agreement.
- Compact tractors. Smaller tractors for estates, smallholdings run as businesses and equestrian yards can be funded too. Agreements of £25,000 or less are only available to limited companies and LLPs through us.
Harvest and grass machinery
Combines, forage harvesters and balers work for a few weeks a year, so the cost has to be recovered from a short season. Lenders understand this, and many will time payments for after harvest or silage. For businesses that run this kit across many farms, see asset finance for agricultural contractors.
- Combines and headers. Usually the largest single purchase on an arable farm, often funded over 5 to 7 years when new.
- Balers and wrappers. Widely funded new and used, and often bought as a pair on one agreement.
- Specialist harvesters. Potato and beet harvesters have a narrower resale market, so lenders may want a larger deposit or a shorter term.
Seasonal and annual payments
Farm income arrives unevenly, after harvest, livestock sales or milk cheques, and many agricultural lenders will shape payments around it.
- Seasonal profiles. Higher payments in the months when the farm is paid, and lower or no payments in the quiet months.
- Quarterly, half-yearly or annual payments. Fewer, larger payments, usually timed for after harvest or a main sale.
- Deferred first payment. A gap of a few months before the first payment, so a machine bought in spring can earn before it starts costing.
Paying less often usually costs a little more interest overall, because the balance comes down more slowly.
What lenders look at on farm machinery finance
- Make and model. Machines from the main manufacturers have an active second-hand market in the UK and abroad, which helps the lender and can support a lower deposit.
- Age and hours. Lenders cap the machine’s age at the end of the agreement, so an older tractor or combine may get a shorter term.
- Where you buy it. Dealer sales are the simplest to fund. Farm sales, auctions and private purchases are possible but usually need an inspection and proof of ownership.
- Farm income. Lenders understand that farm profits vary with prices and the weather, and look at several years of trading rather than one result.
Hire purchase, finance lease and operating lease compared
Hire purchase suits machinery you will keep for years. A lease suits you better if you want to spread the VAT or replace machines on a set cycle. Our types of asset finance guide covers each option in more depth.
| Option | How it works | Best for |
|---|---|---|
| Hire purchase | You pay a deposit and fixed payments, and own the machine after the final payment and any option fee | Farms keeping a tractor or combine for many seasons |
| Finance lease | You rent the machine for most of its working life. At the end you extend at a low rent, or sell it for the lender and keep most of the proceeds | Spreading the VAT and keeping upfront costs low |
| Operating lease | You rent the machine for part of its life, usually with an annual hours limit, then hand it back or upgrade | Farms that change tractors every 2 to 4 years |
Hire purchase for farm machinery
Hire purchase is the most common way to finance farm machinery. You pay a deposit, usually around 10% plus the VAT, or use a part exchange, then fixed payments. Ownership passes to you after the final payment and a small option-to-purchase fee. As the owner for tax, the farm may be able to claim capital allowances on the machine.
Finance lease for farm machinery
A finance lease keeps the upfront cost to a few rentals, and VAT is spread across the rentals rather than paid at the start. The lender owns the machine throughout. At the end of the main term you can keep using it for a low secondary rent, or sell it on the lender’s behalf and receive most of the sale proceeds.
Operating lease for farm machinery
An operating lease sets the rentals against what the machine is expected to be worth at the end of the term, so the lender carries the resale risk. It is most common on new tractors, with an agreed annual hours limit. At the end you hand the machine back, extend the lease or upgrade. Excess hours or damage may be charged.
Used tractor finance costs: a worked example
A £65,000 used 150hp tractor with a front loader costs about £1,860 a month on a 3-year hire purchase, or about £1,456 a month over 4 years.
| Item | 3 years | 4 years |
|---|---|---|
| Price including loader (excl. VAT) | £65,000 | £65,000 |
| Deposit (10%) | £6,500 | £6,500 |
| VAT paid upfront | £13,000 | £13,000 |
| Amount financed | £58,500 | £58,500 |
| Monthly payment | £1,860.28 | £1,455.77 |
| Total interest | £8,470 | £11,377 |
The 4-year term lowers the monthly payment by about £405 but adds around £2,907 of interest. Used machines are usually offered shorter terms than new ones, and a part exchange can replace the cash deposit.
Illustration calculated in October 2026, assuming an interest rate of 9% a year. It is not a quote. Your rate depends on your trading history, credit profile and the machine.
VAT and tax on farm machinery finance
| Option | VAT | Usual tax treatment |
|---|---|---|
| Hire purchase | Paid on the full price at the start, reclaimable if you are VAT registered | You may be able to claim capital allowances, such as the Annual Investment Allowance, or full expensing for companies on new machinery, and the interest is deductible |
| Finance lease | Added to each rental | Rentals are usually deductible |
| Operating lease | Added to each rental | Rentals are usually deductible |
Tax depends on your circumstances, so check the treatment with your accountant.
What lenders ask for
Most farm machinery finance applications need the following.
- Your last 2 years of accounts, or management accounts and a forecast if you are newer
- Your last 3 to 6 months of business bank statements
- A quote or invoice from the seller, showing the make, model, serial number, year and hours if used
- Details of any part exchange and any finance still owed on it
- Photo ID and address history for each director, member or partner
- Details of any existing finance agreements
Related guides
- Business and site equipment finance, for all our site, office and business equipment guides
- Asset finance for crop farming, for grain dryers, stores and irrigation
- Asset finance for agricultural contractors
- Asset finance for dairy farms
- Telehandler finance
- Asset finance for horticulture businesses
- Asset finance for landscaping and grounds maintenance
- All sectors we finance
- Types of asset finance
Who we can help
We arrange tractor and farm machinery finance for UK limited companies and LLPs, and for sole traders and partnerships on agreements over £25,000 that are for business purposes. We are not authorised by the FCA, so we cannot arrange agreements of £25,000 or less for sole traders or partnerships of two or three partners, or finance for personal use.
Tractor and farm machinery finance FAQs
Can I finance a used tractor?
Yes. Used tractors from the main manufacturers are widely funded, especially through dealers. Lenders look at the year and hours, and cap the machine’s age at the end of the agreement, so an older tractor may get a shorter term. Farm sales, auctions and private purchases are possible with an inspection and proof of ownership.
How much does it cost to finance a tractor?
It depends on the machine, the term and your business. As an illustration, a £65,000 used tractor costs about £1,860 a month over 3 years on hire purchase at 9%, after a 10% deposit and the VAT paid upfront, or about £1,456 a month over 4 years.
Can farm machinery payments be made seasonally or annually?
Often, yes. Many agricultural lenders offer seasonal, quarterly, half-yearly or annual payments, so the cost lines up with when the farm is paid. Paying less often usually costs a little more interest overall, because the balance comes down more slowly.
Can I use my old tractor as a deposit?
Usually, yes. The trade-in value of your existing machine can be used as the deposit. If there is still finance owed on it, the dealer settles that first and the remaining equity goes towards the new machine.
Can a farming partnership or sole trader get machinery finance?
Yes, on business agreements over £25,000. Many farms trade as partnerships or sole traders, and lenders are used to working with them. Agreements of £25,000 or less for sole traders and partnerships of two or three partners are regulated, and we are not authorised by the FCA to arrange them.
Should I use manufacturer finance or a broker?
Manufacturer finance can be competitive on new machines, particularly during promotions. A broker compares it with banks and independent asset finance lenders, which matters for used machines, mixed-brand fleets and farms that want seasonal payments or to refinance machinery they already own.
Can I raise cash against machinery the farm already owns?
Yes. Through a sale and hire purchase back, a lender buys machinery you own outright and sells it back to you over a fixed term, so it stays on the farm. Newer machines from the main manufacturers raise the most. Farms use it to fund new kit or add working capital.
Get a tractor or farm machinery finance quote
Tell us what you want to finance
Send us the machine, the price, whether it is new or used, and when in the year you would like the payments to fall. We will come back with the options that are realistic and what they are likely to cost.
About the author
Marcus Wright is the owner and founder of Bolton Business Finance Ltd, which trades as Finance Assets. He has worked in financial services since 2008, beginning his career at Santander, and has been a commercial finance broker since March 2019.
He founded Bolton Business Finance in 2020 to give businesses access to the whole lending market rather than one bank’s own product range. The firm is a member of the National Association of Commercial Finance Brokers and works with a panel of 135+ lenders. Call 0161 546 9128.
Finance Assets is a trading name of Bolton Business Finance Ltd, an independent commercial finance brokerage, not a lender. We are not authorised by the Financial Conduct Authority and can only complete non-regulated introductions. All lending is for business purposes only. Registered address: Westgate House, 1 Westgate Avenue, Bolton, Greater Manchester, BL1 4RF. Company number 12495909.