Research Recap: Is the agricultural economy changing how farm owners obtain debt capital?

By: Katelyn Godoy
Photo of a red farm tractor with John Deere implements

Photo Credit: Wikimedia Commons

“The Rise in Implement Dealer Financing”

Disciplines represented:

Farm management, agribusiness, real estate, finance, economics

Schools/contributing organizations:


  • Jennifer Ifft, Mueller Family Sesquicentennial Faculty Fellow in Agribusiness and Farm Management and Assistant Professor
  • Todd Kuethe, Department of Agricultural and Consumer Economics, University of Illinois
  • Kevin Patrick, National Agricultural Statistics Services, United States Department of Agriculture


Farmers rely on external debt capital for various business purposes, including production activities, marketing, and to provide a valuable source of liquidity in responding to risk. They may obtain this debt capital from a variety for sources, including banks, cooperative lenders, commercial bank lenders, and direct loan servicers.

In light of the recent downturn in the agricultural economy, some industry observers have noted an increase in the number of farm owners who may be seeking out alternative forms of external debt capital, such as through implement dealer financing.

In their series of reports, Ifft, Kuethe, and Patrick, rely on farmer survey data from the United States Department of Agriculture to highlight the volume and share of debt supplied by implement dealers. The results reflect the following:

  • Implement dealers have an increasing share of long-term, non–real estate lending.
  • Farms using implement dealer financing have similar levels of financial stress as farms who do not use implement dealer financing.
  • The largest farms are more likely to use traditional lenders for machinery and equipment lending. This may be due to the similarity of loan terms between implement dealers and traditional lenders for the largest farms.

Publication information:

This series was published in farmdoc Daily, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign in May 2018.

Read the full articles below to learn more about the current level of debt capital provided through implement dealer financing and how the share of debt has evolved over time.

The Rise in Implement Dealer Financing, May 9, 2018

Farmers’ Use of Implement Dealer Financing, May 16, 2018

Implement Dealer Financing and Farm Financial Stress, May 25, 2018