FINANCIAL MANAGEMENT

1st FCS financing program

helps dealers

serve customers

     1st Farm Credit Services’ Dealer Financing Program has all the ingredients for a successful sales generation recipe, according to John Ruh, salesman with DeKane Equipment Corporation, Big Rock.

     Not only does the program feature extremely competitive interest rates, it also has a convenient, streamlined application and quick processing turnaround, all backed by responsive, professional service, says Ruh.

     And a benefit he particularly likes is that both loans and leases are available through the program.

     "It’s the simplest form of getting our customers credit that we deal with," Ruh stresses. The simple, one-page application makes gathering financial information from their customers a breeze, something that both the customers and the dealer appreciate, he adds.

     The application is then faxed to Lyn Ruder, 1st Farm Credit Services’ Agribusiness Group client service representative, who processes the request. The credit is approved and the loan documents are prepared and faxed back to the dealer. "All I need to do is get the customer’s signature," explains Ruh.

     In nearly all cases, he receives prepared loan documents within 24 hours, Ruh continues. But it is not unusual to fax an application in the morning and have completed documents in hand by afternoon, he elaborates. "And 1st FCS even takes care of filing the UCC (the financing statement filed with the state under the Uniform Commercial Code), making it even easier for dealers," he adds.

     For convenience, interest rate sheets are faxed to dealers monthly.

     "A farmer’s tax situation is complicated today and varies by individual," Ruh underscores. That’s why having a lease option as part of the financing program is so important. It provides the dealer one more alternative to meet his customer’s needs and bring added value to the customer-dealer relationship, he indicates.

     Ruh says the lease option is particularly useful for short-line equipment like tillage implements. "Most manufacturers don’t offer leases for this type of equipment."

     Some of the other unique benefits leasing provides producers are reducing initial cash outlay, freeing up working capital, tax deductibility of lease payments and often quicker asset write down when compared to standard depreciation of owned equipment.

     Leasing can be particularly valuable when a producer has used all the annual Section 179 deduction for the year -- or for acquisitions in the last quarter of the year -- and wants to manage the Internal Revenue Service’s (IRS’) mid-quarter convention restrictions.

     Ruh says DeKane’s financing through the program is about 50 percent loans and 50 percent leases.

     Another feature of the program that appeals to dealers is the loans and leases are non-recourse to the dealer. In other words, the dealer doesn’t have to invest in the loan or lease in case it later exhibits repayment problems. Most manufacturer financing programs require dealers to invest in the loan, tying up important capital. "Dealers have enough headaches without recourse," Ruh emphasizes.

Ruh says the program guidelines help the dealers provide quality loans and leases. "We haven’t had to go repossess a piece of equipment yet," he declares.

     He says he also likes 1st FCS’ flexibility. "1st FCS has been very willing to work with us on deals, helping us close more sales," Ruh continues. "Our customers like the convenience of purchasing and financing their equipment in one stop."

     The service from everyone working with the program, he says, has been friendly and customer-focused.

     "I like working with the dealer program because I can provide a service to new and existing clients that is simple and fast to use," states Ruder. "I can complete the loan process and get closing documents printed and out to the dealer in a few hours. I enjoy working with the dealers as they are always friendly and helpful when I call with any questions," she adds.

     "The dealers have been very supportive of the program, and their helpfulness makes my job easier."

     In addition to equipment dealers, the financing program also is available to grain bin, machine shed and irrigation dealers, as well.

     DeKane Equipment Corporation is located in southern Kane County, just east of Big Rock. It has served the area since 1880, starting out as a provider of hardware and then moving into farm implements. It carries CNH equipment, including DMI tillage implements. It also carries Kubota tractors, as well as lines of mowers and other lawn maintenance equipment, including Cub Cadet, Woods, Grasshopper and Dixon.

     President Bob Hardekopf is the senior of the dealership’s three owners, joining in 1948; Jim Shrader in 1959; and sales manager Russ Ruh (John’s brother) in 1972.

     The Ruh family has a long tradition of farming. Father, Herbert, and brother, Steve, still operate the family farming operation. John left dairy farming in 1988 to join the DeKane sales department, which today numbers three people.

     DeKane has used the dealer financing program since its debut in 1996. Says Ruh in summarizing why the program has been so effective, "It helps us sell equipment because it fits the needs of our customers. And they like the convenience of purchasing and financing their equipment in one stop."