3 Advantages Of Leasing Heavy Equipment Vs. Buying It
Having the right equipment might be one of the most important aspects of your company, but purchasing heavy equipment can be expensive. If you need new equipment, there is a different way to get it. Heavy equipment leasing is becoming very popular because it offers so many benefits. If you would like to learn about these benefits, keep reading.
Low Upfront Costs
One of the biggest problems you will encounter when purchasing equipment is the large down payment the company may require. It is very rare for heavy equipment companies to offer 100% financing, which means you may need to come up with a large amount of cash to put down on the equipment.
Through heavy equipment leasing, this will not be a problem. There are companies around that may offer 100% financing, and this is a way for you to get equipment without putting any money down. Even if a company doesn't offer 100% financing, you should have no problem finding one that will finance most of the cost. Either way, your business's cash flow will not be harmed if you choose to lease the equipment.
In addition to protecting your cash flow, there is also a chance that leasing equipment might offer better tax benefits for your business than purchasing equipment. To find out for sure, you should talk to your accountant.
Lower Monthly Payments
A second benefit of leasing versus buying is that your monthly payments are likely to be less if you lease. When you purchase equipment, the down payment amount will come off the purchase price. The remaining balance is then divided into monthly payments over the life of the loan, and interest is added. This means that you will pay the entire price of the equipment plus interest.
Now consider how a lease works. You may have to put a small down payment on it when you lease it, and you will have to make monthly payments. The difference is that the monthly payments will not cover the entire purchase price of the equipment; they will only cover a portion of the equipment's value.
This is why at the end of a lease, you may have the option to purchase the equipment for a certain amount. This occurs because you did not have to pay for the full purchase price of the equipment during your lease; you only paid for part of it. The end result of this is lower payments for equipment leases.
If you do not have to put as much down and if your payments are lower, this could open up the possibility of having access to equipment that is much better than what you could have afforded had you purchased it.
Having the right equipment for the services your company offers can greatly affect the profitability of the company. Better equipment may help you complete jobs faster, and it may also help you complete them with fewer workers. Having nice equipment could also improve the image of your company, which is something that you cannot put a dollar amount on.
It's also important to consider how time can also affect this decision. Suppose you will only need this particular piece of equipment for two years. Would buying it make sense in this case? If you purchased it, you would have to sell it when you were finished with it, and you could have trouble finding a buyer. On the other hand, if you know you will only need it for two years, you could set up the lease so that it ends after 24 months.
If your company is ready to obtain new heavy equipment, you may want to look into leasing it. This option does have a lot of advantages, and you can learn more by contacting a company that specializes in heavy equipment leasing.