A.“With bank restrictions on obtaining lines of credit, and the reduction of existing lines of credit, we’ve seen a 60% decrease in tractor sales in the past 2 years. Our margins are down to a point where it’s hard to keep employees. Our target market is willing to purchase tractors, but is leery of making a decision.”
—Gary and Janet Farkas, Legacy Tractor Sales, Fort Collins, Col.
A.“Approvals with our major lender dropped from 80% to 40-45%. In some cases, customers went to a competitor and received financing. It was very frustrating and cost us a 15% increase in wholegoods sales in 2009. The ironic part was this lender received TARP money.”
—Neil Borum, Nassau Equipment, Yulee, Fla.
A.“About 90% of our rural lifestyle customers finance their purchases. Turndowns are up 40-50% in recent years, and our sales have been affected. Our dealership isn’t dealing with this very well. Credit went from being very loose to extremely tight. The credit crunch has also forced us to lower our wholegoods inventories 30% compared to recent years.”
—Mike McCrate, Tulsa New Holland, Tulsa, Okla.
A.“We’ve been fortunate to have excellent new and used equipment financing programs lately. We had as much as 18 months interest-free on used items. Customers with good credit have also secured standard rates of about 5%. Company-focused rates on certain types of equipment are even lower than 5%. The CNH rates sold a lot of equipment in the last quarter of 2009.”
—James Campbell, manager, Birkey’s Farm Store, Oakland, Ill.
A.“We have a lot of lookers, but they’re slow to buy. Everyone is looking for a special deal, new or used. We buy, sell and trade used equipment with OEM dealers across the U.S., and that’s been helping us during the credit crunch.”
—Steve Davis, De Soto Equipment, De Soto, Iowa
A.“We handle multiple brands of tractors and manufacturer credit companies. We usually find that a credit company or alternative finance company will take a customer’s application. We might require a larger down payment to make the deal, and it might not be their preferred brand of tractors and equipment or feature the low rates advertised by manufacturers.”
—Art White, vice president, White’s Farm Supply, Waterville N.Y.
A.“We went to a local credit union that started an indirect finance program for dealers and it has worked great. We did about 65% of our loans through this program and there will be more this year.”
—Brian H. Hartzfeld, sales/ rental manager, Bobcat of Erie, Pa.
A.“Kubota represents about 80% of our sales. We’ve seen rejections increase about 20%, which isn’t bad all things considered. I’d heard, at one time, some of the other major manufacturers’ credit divisions planned a 20% contract failure rate. Kubota’s goal is 0%. So the effect on us has been minimal.”
—Ken Adams, president, Adams Tractor, Spokane, Wash.
A.“Trying to get customers credit has been a challenge. People who had shaky credit in the past could not get financed in 2009 or they faced very high interest rates.”
—Gene Saville, Lamb and Webster, Springville, N.Y.
A.“We’ve experienced customers being more cautious in making purchasing decisions, but we’re not experiencing any problems with consumer credit restrictions. Case IH and Kubota were aggressive in the past year with 0% financing offers to customers. I can’t recall any of our customers being denied in the past year.”
?—Randy Runde, Ritchie Implement, Barneveld, Wis.
A.“We haven’t seen a big effect on the consumer. The customers that are buying have good credit. In many cases, they’re taking advantage of cash discounts from the companies and low interest rates from their bank. We’ve asked for more detail on some credit applications, but nothing that’s held up the purchase.”
—Brian Brownlee, Brownlee Equipment, Earlton, Ontario