Herd Leasing - PricingWhat does it cost?
If CowBank purchases a cow for $1,700 to lease to a client:
- The monthly rental is $38.25 and is fixed for the 5 year term of the lease
- The price to buy the cow at the end of the lease is $340 (20% of original purchase value)
- The monthly rental is equivalent to 7.0 cents/litre for a cow producing 6,500 litres per year
|Herd Purchase Value||$100,000||$200,000||$300,000|
|Herd monitoring fee (monthly)||$125||$125||$125|
|Herd rental fee (monthly)||$2,250||$4,500||$6,750|
With the rental payments being fully tax-deductable, the finance cost after tax is equivalent to a normal mortgage rate of ~10% p.a. (where the farmer's average tax rate is around 25%). Applicants should obtain professional advice for their own situation.
(The herd monitoring fee covers the cost of annual NLIS scanning of the herd)