Farmers Funding & Advice
It is October 14th ‘Thank the Farmer Day’therefore all articles and videos are freely accessible.
Offered: Farmers Funding & Advice
Today 10:00 am – Sjoerd de Beer
My son’s cell phone died after five years. He needs another one. He has some money in his account but not enough for the latest model. If I contribute some money he can buy this. Well, what do you do then?
We have decided that he will buy a one-year old refurbished device with his own budget. Not the very latest, but a big step forward compared to his old device and perfectly suited to his use.
There will be various mechanization fairs in the coming weeks, where the need for investment will again be stimulated. It is wise to invest carefully based on short and long-term perspectives. Suitable for budget, but especially for what the company needs. New may be the most obvious, but you also pay for progress that you don’t always really need. As an entrepreneur you also make this decision. Refurbished, the trendy word for reconditioned or second-hand, is more budget-friendly and perfectly suitable for the work. Okay, the fully checked second-hand tractor may just lack a few HP and the latest technology, but when do you really need that? With second-hand cars you have more risk and usually a shorter warranty period.
In recent years you could lease tools and machines cheaply, at up to 0% interest. You could then pay for the purchase for free over several years. This is no longer an issue with the sharp increase in interest rates. In any case, leasing leads to a higher investment. That’s not a problem at all, but be aware of it.
The government offers tax benefits on certain new machines. You will receive an additional investment deduction for these machines if the machine is sufficiently environmentally or energy efficient. New machines also sometimes have the option of accelerated depreciation. If these options apply, you may not have to break the bank as much for new as for second-hand. This can change the final choice between new or used, after all the tax authorities help pay. You also always have to pay for the investment yourself first and you often only notice the tax savings later in time. Always consider what the net price of your needs is.
‘Men will remain boys, only the toys will become more expensive’ comes to mind. Funny or more? Investing in the company is of course much more complex than replacing a mobile phone. But taking the time to choose and being well informed about all technical, business economics and tax aspects is equally necessary in both cases.
Farmers Funding & Advies takes care of business, business economics and tax-legal matters and realizes the most suitable financing.
Sjoerd de Beer
Sjoerd de Beer is an experienced business advisor at Farmers Funding & Advies. In more than 35 years of working with agricultural entrepreneurs, he has acquired knowledge and know-how in business, financial and fiscal areas.