Leasing company offers broad range of ag equipment

PEORIA, Ill. — A west-central Illinois leasing company nears its 50th year of providing a broad range of agriculture and construction equipment.

LSI Equipment Leasing, based in Galesburg, covers 28 states, from the Canadian border to Texas and from Virginia to Colorado.

“We are a family business. We started in 1976 and we’ve been leasing equipment ever since. We do agriculture and construction equipment, grain bin buildings, trucks, semis, trailers, basically anything that’s on the farm is kind of what we’re centered around,” said Nick Gehricke, LSI Equipment Leasing business development manager, at the Greater Peoria Farm Show.

“We do a finance lease and a true tax lease — depending on what you’re looking for, we can find a need and see which need fits best.”

Options

LSI’s true tax leases are offered on all brands of new and used agricultural equipment, construction equipment, truck, trailers and grain bins. The program allows customers to write off lease payments while improving their cash flow.

Leases are tailor-made to each customer’s needs and can be structured on quarterly, semiannual, or annual payment structures. Lease terms range from three to six years on used equipment and three to seven years on new or like-new equipment.

In 2021, LSI began offering its clients another leasing option referred to as finance lease, offering lease financing for items like farm buildings, specialized vehicles and manufacturing. Unlike leases involving farm equipment, these types of leases have little to no buyout at the end of the lease term.

LSI’s sale-leaseback program allows clients to use the equity in their equipment while writing off previously depreciated equipment. This has proven to be an effective way to put cash back into customers’ operations and has been an efficient balance sheet management tool.

Gehricke was asked about the advantages to lease versus owning equipment.

“It improves balance sheet debt. You can write off previously depreciated equipment. We can do single or multiple-unit leases, and the biggest thing is freeing up operating lines of credit,” he said.

“So, if you’re doing off-balance sheet financing like in a lease, when you go back to your bank if you’re acquiring land, for example, or if you’re getting operating loans, it looks like you have less debt on the schedule at least equipment-wise. It can help get better approved loan rates in other areas.

“In the leaseback format, you can pull equity out of the equipment. So, even if you just need a little bit more cash flow this year or capital to get something done, you can do that, too. You can stretch it out between three to six years on something like that.”

LSI isn’t just “red” or “green” specific for its equipment.

“We’re not brand specific. We’re open to anything like that. We have some stipulations on equipment and hours and stuff. It kind of depends what you’re looking for, but $30,000 is kind of our minimum dollar and anything up from that is really where we’re at. We can do as short as three years, as long as six years on used equipment. We can go up to seven years on new equipment,” Gehricke said.

“Payment terms are typically between quarterly and semiannual — depending on the unit, it might potentially be annual payments.

“We have flexible residual options that work best. Typically, a lease-to-own, that’s our goal and most of our customers do purchase at the end. Some, if they’re not, they’re using it as a trade-in and keeping that rollover.”