The all-in cost of grain dryers, line by line
Buyers who finance grain dryers rarely fund just the equipment. The actual loan principal is the bundle of items the lender wires to the seller, and that bundle is bigger than the spec sheet implies. The list below covers what shows up on the funding statement.
Base equipment. The unit itself, in the configuration the seller is offering.
For grain dryers, base pricing typically runs $145K to $203K , with the higher end reflecting software, control, and integration packages rather than the base unit alone.
Attachments, options, and add-ons.
Buyer-selected items show up on the invoice as separate lines. These are financeable in nearly every case. The decision is whether to roll them into the loan principal or pay them out of pocket at delivery.
Delivery, setup, and training.
For equipment that ships from a distant dealer to a remote job site, delivery and rigging can add 2 to 5 percent of base price. On grain dryers specifically, mobilization to the work site after delivery is the buyer responsibility unless negotiated otherwise.
Sales tax and use tax.
Sales or use tax is owed in most states and typically rolls into the financed amount; the lender remits it at closing. State conformity rules vary, and a few states offer manufacturing or production exemptions that change the math. Confirm the tax line with the seller before signing rather than discovering it at funding.
Extended warranty, service contract, and consumables.
Service and software-maintenance contracts on this class of equipment commonly run 8 to 18 percent of base price annually. Bundling the first year into the loan is standard. Bundling multiple years into the loan converts a recurring expense into a financed asset, with the same trade-off as financing any other soft cost.
Four grain dryers borrowers we route every week
The profile of the buyer matters as much as the equipment when underwriters price a grain dryers deal. The four profiles below cover roughly 80 percent of the applications we route. Each has a typical structure, a typical down payment expectation, and a typical lender match.
The acquisition buyer
A business buying an existing operation that includes equipment. Some lenders treat this as a business loan, others as straight equipment financing. The split matters for both rate and what documents the lender will ask for.
The capacity-doubling buyer
An operator adding a second shift, a second line, or duplicate equipment to meet existing demand. Cleanest story to underwrite because the demand is already documented in the historical revenue. Loan term often matches the equipment useful life rather than being shortened against perceived risk.
The succession buyer
A family member, key employee, or partner buying out an exiting owner and continuing the operation. The equipment may transfer as part of the deal or be re-financed at the buyer side. Lenders need clarity on which is happening before they price the transaction.
The diversification buyer
An established operator adding a new equipment class outside their core business (a trucking firm adding a tow truck, a landscaper adding paving equipment). The story to the lender hinges on related-experience and a plausible revenue path; expect questions about how the new asset will be put to use.
How lenders evaluate a grain dryers application
Underwriting on grain dryers financing weights the borrower side first and the equipment side second. The borrower factors below carry the most influence on rate, term, and down payment. Knowing how each maps to your specific situation lets you put the application together so the strong parts stand out.
- Time in business. The single most weighted factor for most equipment lenders. Two years in business opens up the full program menu. Under one year narrows the lender pool and often requires larger down payment.
- Financial statement quality. For transactions above $250,000, lenders weight the quality of financial statements: are they CPA-prepared, are they current within 90 days, do they reconcile to bank statements. Strong financial reporting opens up better pricing on larger transactions.
- Equipment as collateral. The equipment itself secures the loan. Asset class, age, condition, configuration, and resale market depth all factor into how lenders advance against the cost.
- Industry sector. Some industries get standard pricing, some get a premium, some get a discount. Long-term stable sectors with low default rates (utility infrastructure, established medical, government contractors) typically price favorably.
- Owner background and depth. Years of related industry experience, prior ownership of similar equipment, and any documented success operating the asset class affect underwriting. New entrants to a class price differently from established operators expanding within their lane.
Diligence on grain dryers: the items that matter
Equipment financing on grain dryers closes cleanly when the pre-purchase walk catches the items below. When it does not, the issues surface post-funding, and the lender owns nothing of the resolution. Read the seller representation against the items below before signing.
- Attachment compatibility. For machinery with attachments, confirm the attachments included are compatible with the base unit configuration (quick-coupler standards, hydraulic pressure ratings, mounting interfaces). Buying attachments that do not fit is a common surprise on used equipment with mixed-vintage components.
- Emissions compliance. For diesel-powered equipment, confirm the unit meets current emissions requirements for the state and operation it will be used in. Tier 4 final compliance, urea/DEF system status, and after-treatment health all affect both legality of use and resale value.
- Wear items documented. Tires, tracks, undercarriage, cutting edges, brakes. Photograph and note remaining life. These are the items that will need replacement first and that buyers under-budget for.
- Recall and campaign status. Manufacturer recalls and service campaigns sometimes go uncompleted on used equipment. Verify outstanding recalls before purchase; some are mandatory and prevent the equipment from being registered or operated in certain jurisdictions until completed.
- Electrical and instrument cluster. All gauges working, all warning lights cycling correctly on key-on, no fault codes stored in the ECU. Modern equipment with electronic controls is expensive to diagnose if anything is wrong.
- Hours-meter or odometer history. Beyond the current reading, confirm the historical pattern of use. A unit with 4,000 hours from regular daily use is different from a unit with 4,000 hours from intermittent project work. Service records, when available, document the use pattern.
Common pitfalls on grain dryers financing
The pitfalls below come from real loan files where a buyer signed paper they did not fully understand. None of these are dealer or lender fraud. They are gaps between what was assumed and what was documented. Catching them at the application stage costs nothing; catching them after funding costs real money.
Insurance lapse triggers
Lenders require physical damage insurance on the financed equipment for the life of the loan, with the lender named as loss payee. If your policy lapses, the lender places force-placed insurance at three to five times the cost of an open-market policy and bills you for it. Keep proof of insurance current with the lender.
EFA versus loan documentation differences
An Equipment Finance Agreement looks like a lease to a casual reader but behaves like a loan. Buyers who do not understand the structure sometimes try to apply lease-specific tax treatment to an EFA, or vice versa. Read the structure on the front page of the funding documents and confirm with your CPA before electing tax treatment.
Operating lease end-of-term costs
FMV and TRAC leases include end-of-term obligations that surprise inexperienced lessees: excess wear and tear charges, return logistics, mileage or hour overages, and the fair market value buyout calculation itself. None of these are inherently bad, but knowing the rules at lease signing prevents end-of-term disputes.
Trade-in payoff timing
If your transaction includes a trade-in with an existing lien, the new lender pays off the trade-in lien as part of the funding. Verify the trade-in payoff amount the new lender uses matches the actual payoff from the prior lender (which can include accrued interest and fees through the funding date). A $500 to $2,000 gap is common if this is not reconciled.
Quick answer
Grain Dryers financing typically prices at 7-12% APR for prime credit (720+ FICO) and 11-17% for fair-to-challenged credit (600-679). Standard terms run 36-72 months with 0-15% down. Approvals close in 24-72 hours on app-only programs (typically under $150K) and 3-7 business days on full-financials deals. Required documents: driver license, voided business check, last 3 months bank statements, and the equipment quote.
Quick answers
Direct answers to the questions we hear most on grain dryers applications. Each answer is one we have given to a real buyer in the last quarter.
How is interest calculated on equipment loans?
Most equipment loans use simple interest amortization. Each payment includes principal and interest portions, with the interest portion declining as the balance amortizes. EFA structures may use rate-factor pricing instead of stated APR; the dollar cost is similar but the math is different.
What is a UCC-1 filing?
A UCC-1 financing statement is a public record filed by the lender that establishes a security interest in the financed equipment. It is filed at the Secretary of State (or equivalent) and runs for 5 years. The UCC must be terminated when the loan is paid off, and the borrower is responsible for confirming termination.
What is the difference between a captive lender and a bank?
Captive lenders are manufacturer finance arms (CAT Financial, John Deere Financial, etc.) that finance their own equipment. They often offer promotional rates and longer terms. Banks finance any equipment but typically at standard market rates with more conservative underwriting and longer approval cycles.
What happens if I miss a payment?
A 10-day late payment typically triggers a late fee of 5 to 10 percent of the payment amount. Some contracts also trigger default interest, jumping the rate by 4 to 6 points until the account cures. Repeated late payments can trigger acceleration of the balance and equipment repossession.
Can I finance used equipment?
Yes. Used equipment financing is a major category, with most lenders willing to fund equipment up to 5 to 10 years old. Older equipment requires specialty programs with shorter terms and higher rates. Authorized refurbished equipment from OEM-direct programs often qualifies for new-equipment-equivalent terms.
Can I finance equipment with no time in business?
Yes, through startup-specific programs. These require strong principal credit (typically 700+ FICO), verifiable industry experience, and larger down payments (15 to 25 percent). New-authority trucking, first-time shop owners, and new medical practices all have dedicated startup programs.
Cost stack: what total ownership actually includes
The equipment purchase price is one line on the financed amount. The actual cost of ownership over the life of a grain dryers deal includes the items below. Buyers who only budget for the purchase price often hit cash-flow surprise within the first 12 months.
- Installation and commissioning. Site preparation, electrical, plumbing, leveling, calibration, and operational commissioning. Runs 5 to 25 percent of equipment price depending on equipment category.
- Insurance premiums. Commercial equipment insurance with lender named as loss payee. Annual premiums run 1 to 5 percent of equipment value depending on coverage and equipment category.
- Software licenses. CAM, design, control, and operational software. Often subscription-based with annual renewal. Can run $5,000 to $50,000+ per seat depending on equipment category.
- Pre-payment penalties. Standard early-payoff penalty: 3 percent of payoff in year one declining to zero by year three. Or flat fee of $500 to $2,000. Varies by lender.
- Tooling and accessories. Cutting tools, attachments, fixtures, and accessories specific to the equipment. Often quoted separately from base equipment. Can run 10 to 40 percent of equipment cost.
- End-of-term residual or buyout. Lease structures: fair market value buyout at term end (FMV lease) or stated residual amount (TRAC lease). Loan/EFA structures: $1 buyout or no buyout. Plan for this from day one on lease structures.
- Equipment purchase price. Base equipment price as quoted by the dealer. Negotiable, especially on used equipment and end-of-quarter new equipment.
- Title transfer and registration. Titled equipment (trucks, trailers, some construction equipment) requires title transfer and registration. State-specific fees from $50 to $500+.
What if something changes mid-term
Equipment loans run for 36 to 96 months. Things change. The patterns below cover the situations that come up most often during the loan term and how they typically resolve.
Personal guarantee called on default
Personal guarantee makes the principal personally liable for the debt if the business defaults. Working with the lender on workout or restructure is the preferable path. Personal bankruptcy is a real consequence of unresolved default with personal guarantee.
Pre-payment penalty obstacles to refinancing
Calculate the breakeven: penalty cost vs. interest savings on refinanced rate. Common breakeven is 12-18 months. If you expect to keep the equipment 24+ more months at lower rate, the penalty usually pays back.
Borrower discovers equipment was misrepresented at sale
The lender funded based on the bill of sale, not the equipment condition. Disputes between buyer and seller after funding are between those parties. The loan obligation continues regardless. Independent pre-purchase inspection prevents most of these situations.
Equipment serial number does not match UCC filing
Identify the error (dealer substitution, lender filing error, etc.) and resolve before subsequent financing. The UCC needs to match the actual collateral for enforceability. Lender amendment of the UCC handles this in most cases.
Authoritative sources
The rate ranges, structures, and program details on this page are informed by our partner-lender book and the public industry resources below. We link out so you can verify any specific claim or go deeper.
