Is Equipment Leasing the Answer for Your Construction Business?
Construction companies require a plethora of specialized equipment such as cranes, bulldozers, cement mixers, and jackhammers. However, purchasing the amount of equipment required to successfully run the business can be extremely expensive. Here are some reasons why equipment leasing may be a viable alternative for your construction business.
When you purchase construction equipment, your company needs to undergo a credit check to secure a bank loan. However, with equipment leasing, credit checks are not always necessary. Even new companies that have not yet established much credit can lease equipment if they put down a deposit and verify that they can handle the rental payments in a timely manner.
Buying equipment involves a tremendous initial investment as well as regular costs for maintenance and repairs. Leasing is less expensive, and rental agreements often include upkeep and repairs of the equipment. To be able to afford rental payments without impeding their cash flow, construction companies can factor their receivables. Factoring allows you to quickly obtain the funds to lease the equipment you require through an online application without the necessity of taking out a bank loan.
Sometimes you only need certain pieces of equipment for specific jobs, and they remain dormant for the rest of the year. Rather than invest a significant amount of company assets in buying the equipment, it makes sense to instead obtain it through a short-term rental.
The high cost of purchasing construction equipment precludes the possibility of upgrading it on a regular basis. Even when your equipment has become outdated, you are forced to hang onto it to justify the expenditure. However, when you lease needed equipment, you obtain the latest models that facilitate productivity and increase customer satisfaction. As lease terms end, you can regularly upgrade these to newer models.
For more advice on equipment leasing for your construction business, get in touch with Ironhorse.