Step 2: Create a Budget

Horses range in price from free to millions of dollars. A lesson program must usually stay within a tight budget, so you need to have a plan to maximize your funds. When discussing a budget, consider whether you are looking to purchase, lease, or accept a donation. Each comes with its pros and cons that will affect your options and choices.

When deciding how much to budget, keep in mind that you will also need to set aside funds for travel costs and pre-purchase examination fees. Write your budget on the Horse Search Parameters form (see Appendix 2).

Purchasing

Purchasing a horse is the most straightforward transaction, as it involves a complete transfer of ownership from the seller to the buyer. Once the horse has been purchased, you, the buyer, have total control over how you will use, care for, and interact with the horse. This also puts the entirety of the risk on you. If something were to happen, such as the horse getting injured, sick, or simply not working well in your program, you would be financially responsible.

Sometimes, when a seller sells a horse, they include a contract called the right of first refusal. This means that if you sell the horse, you are obliged to contact the previous owner and offer them the opportunity to buy back the horse before you sell it to someone else. Sellers who are emotionally invested in their horse may want this option to ensure the horse ends up in a good home. As a program, you must decide if this is a contract you are willing to make and uphold. For all programs, but especially for those that have high staff turnover, it will be vital to keep good records of any agreements made so that when the time comes for the horse to retire, you can honor your commitments.

Leasing

Within the equine industry, there are numerous ways to situate a lease agreement. Leases can range from full to partial use. When leasing a horse, it is crucial to have a legally binding, comprehensive contract in place that stipulates all responsibilities and expectations for both parties.

Leasing can be an excellent option for a program as it is often less costly than purchasing a horse outright. It also ensures the horse has a retirement plan in place (i.e., they can be returned to the owner in accordance with the contract if the horse is no longer suitable for your program). Additionally, some owners may not want to sell their horse but want their horse to have a job in a lesson or equine-assisted services program. A lease allows them to maintain ownership while also giving the horse a purpose. This is not uncommon for older, semi-retired horses.

Proper legal counsel should be sought when creating a lease agreement to protect all parties. Some considerations you will need to have detailed in the contract include, but are not limited to, the following:

• Parties involved
  • o Who is involved in the lease?
• Financial responsibility
  • o Does the lessee pay a monthly fee to the lessor?
  • o Does the lessee cover the horse’s monthly care expenses?
  • o If the horse is injured or needs veterinary care, who pays for it?
• Horse identification
  • o Include a detailed description of the horse, including their name, breed, age, gender, color, markings, microchip/tattoo/brand (if applicable), and any registration information.
  • o Include recent photos and videos documenting the horse’s current condition at the start of the lease. Include relevant veterinary and health information.
• Duration of the lease
• Type of lease (full or partial)
  • o What type of lease is it?
    • A full lease is when the lessee is fully responsible for the horse. They may use the horse any day and at any time. The lessor will not be able to use the horse during the duration of the lease. Included should be stipulations regarding if and when the lessor may visit the horse, including if notice is required.
    • A partial lease entitles the lessee and lessor to use the horse. A clear schedule must be agreed to, which should outline how often, how much, and when the horse can be used by either party.
  • Purpose and use
    • o How may the lessee use the horse?
      • Include specific restrictions, such as a daily or weekly use cap, rider weight limitations, skill restrictions such as no jumping, cantering, etc.
    • o Can the horse be used off-site, such as at shows, clinics, or trail rides.
  • Care and management
    • o Who will take care of the horse’s daily needs?
    • o What is the standard of care, including a feeding schedule?
    • o Where and how will the horse be housed?
  • Veterinary Care and Emergencies
    • o Who pays for veterinary care?
    • o Who decides what care can be given?
    • o Can the lessee administer new medications, therapies, or treatments, such as injections, to the horse?
    • o What to do in case of an emergency if the horse falls ill or gets injured.
      • Who is financially responsible?
      • What care can be provided if the lessee cannot get in contact with the lessor?
    • Loss of use
      • o What happens if the horse is injured or dies, resulting in loss of use, while in the lessor’s care?
    • Insurance
      • o Is the horse insured? If so, by whom?
    • Liability and Risk
      • o Acknowledgment of the inherent risks of equine activities.
      • o Protect the lessee and lessor from risks associated with horse usage.
    • Termination
      • o How and when could the lease be broken?
      • o How will a notice of termination be handled?
    • Payment and expenses
      • o What expenses are covered by each party?
      • o Lease fees, if applicable, including due dates and penalties for late fees.

Donation

Donations can simultaneously be financially advantageous and deleterious. A donation will save you a significant amount of money initially, due to either a reduction in or the complete elimination of the horse’s purchase price. The downside is that many people want to donate horses that have behavioral or health deficiencies. A free horse can quickly turn into a time-consuming, financially expensive project. They may need expensive medications, maintenance such as injections, or other medical procedures.

As owners approach you with donation prospects, be prepared to educate them on the physical nature of the job. Some owners may think that their old, unsound horse would be suitable for an EAS program due to the low-intensity work. This is not the case. Lesson horses, even in EAS, still need to be comfortable and sound, even if their work is considered less physically intense than other disciplines.

Some owners are not willing to make a full donation, but are willing to make a partial donation by reducing the purchase price and donating the remaining amount in kind. This works well for a non-profit program as it provides tax benefits to the donor. This option may help you find horses that are currently out of your price range and bring them within your budget if the owner is willing and excited about your program.

Each donation offer should be thoughtfully considered. Discuss with your team the financial implications of taking on the donation prospect, a retirement or rehoming plan if the horse does not work for your program, and the current needs of your program (refer to your completed Horse Search Parameters form).