Profit from Finance Know-How: Part 2

Unfortunately for area vineyardists, there are no cookie-cutter solutions to financing your equipment requirements, and every equipment lease or purchase decision should be made using the knowledge and experience of your business tax accountant.

In our last issue, we used this column to discuss the pros and cons of two financing strategies: cash purchases and equipment leases. Here, for your information, we examine the two other financing options available to you.

3) Finance Purchases: Negotiating a financed purchase deal is relatively easy. You simply make a down payment and lock in an interest rate, or you can opt for a variable rate. Payments can be spread out over several years. Financing can be arranged for up to 80 months in some circumstances, bringing the payment amount to an affordable level.

On the down side, you're stuck watching expensive equipment become obsolete as vineyard technology changes. Also, over time, you know you're going to pay out more and more in replacement parts and mechanics fees.

In the ag industry, finance purchases are generally amortized over a 5- to 7-year period. This is the kind of capital investment that can be depreciated, predictably reducing your tax liability. Any cash value left after your depreciation period becomes an asset to your company.

When planning your finance purchases, remember that monthly payments are not your only option. Your payment schedule can be structured to work with your cash flow. At least when working with Rainbow, you can choose annual or quarterly payments, or work with us to tailor a schedule to suit your unique business requirements.

4) Rent to Own: This financing option is really an add-on to the three strategies discussed we've previously discussed. Renting to own allows you to put a piece of equipment to work in the field right now, while permitting you to time your lease or purchase advantageously, usually at the end of the growing season.

Because Rainbow works in the farming industry every day, all day long, we have a down-to-earth understanding of growers equipment needs and how those needs will affect their tax responsibilities. Rainbow is flexible and knowledgeable, and we can provide field-tested financing options that will suit your business goals and budget.

Please talk to your Rainbow Ag Field Representative, or contact Barbara Lancaster at 800-427-2404, or e-mail us equipment@rainbowag.com for more information about how Rainbow can finance your equipment needs today.

Maximizing Performance of Rear Tractor Tires It's a fact: Tire pressure affects operating performance. Many growers are not taking full advantage of their radial drive tires performance potential and studies have shown that most rear tractor tires are being routinely over-inflated by as much as 20 psi. Over inflation causes loss of traction, excessive soil compaction, reduced tillage ability and can give the driver a harsh, tiring ride. Under Inflation causes sidewall damage, bead un-seating, undue wear and tear and also results in a bouncy, tiring ride. Proper inflation optimizes traction, reduces soil compaction, significantly extends wear life, maximizes the acres the tires can work, while improving both fuel efficiency and the driver's ride. Radial tires require special attention. It is a misconception that you can tell a faulty radial tire by looking at it. Many operators think that as long there's no bulge, the tire's okay. This is a myth. Radial tires must have a certain bulge in order for the tire to develop its superior traction. Regular bias tires, when inflated correctly, will out-pull over-inflated radials. Shouldn't the tractor or tire dealer set the inflation properly? They should but, unfortunately, many do not. To minimize trailer bounce in transport from factory to dealer, new tractor tires are usually inflated to 30 PSI. When the equipment hits the shop for dealer prep, technicians need to set the tire beads on the rim. That requires a pressure of around 35 PSI. Neither of these numbers fits field requirements, so a correct inflation pressure can get overlooked, and if you don't check, it might affect your tire's performance. The most accurate guide to correct inflation settings will be found in the equipment operator's manual. If you can't find it there, or if you have any other tire questions, contact the Rainbow Ag service department at (707) 462-2404 or e-mail us at service@rainbowag.com.

Craig Bartow: Help in Securing the Harvest

Though he's lived and worked around farm equipment for most of his life, it was a trip to Rainbow to get parts for his grandfather that brought Craig Bartow to Rainbow. It's proof!--helping out grandpa will change your life.

Craig made that trip into town six years ago, just after graduating in Diesel Mechanics at Wyoming Tech in Laramie, and he's been at Rainbow ever since. About three years ago, during an exceptionally busy harvest season at Rainbow, he got drafted for some on-the-spot, in-the field harvester work. Now, whenever there's a problem, we call Craig.

To expand his knowledge and skills, Craig went on to get certified as a Gregoire service tech. During the pick, he spends his nights in the field, making sure every Gregoire Rainbow sells operates at its peak performance. He says he still can't believe the way they perform.

Have a harvester? Need some diesel work? Craig's your man. Call him at (707) 462-2404 or, for after-hours service, contact through his pager at (707) 370-8045.

At Rainbow Agricultural Services, our primary interest is providing great service to our customers. If you have questions or comments, or if there is any way we can serve you better, please e-mail us at:
facts@rainbowag.com

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RAINBOW AGRICULTURAL SERVICES

UKIAH: 235 E Perkins St., 95482, Ph. (707) 462-2404, Fax 707-462-3627
CALISTOGA: 810 Foothill Blvd., 94515, Ph. (707) 942-4566, Fax 707-942-9668
NOVATO: 7546 Redwood Blvd., 94945, Ph. (415) 892-1030, Fax 415-893-1481
LAKEPORT: 1975 Argonaut Rd., 95453, Ph. (707) 279-0550, Fax 707-279-0594

www.rainbowag.com
Copyright © 2001 Rainbow Agricultural Services