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19
Sep

Hidden Benefits Of Leasing Equipment

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Leasing equipment is often the most cost-effective way to free up funds in a company. Leasing makes cash available for other things, like emergencies or any other things that may crop up.

Equipment Leasing Benefits

Many construction companies prefer leasing equipment to buying. Here are some of the advantages:

  • Cash flow is stabilized;
  • Payment structures are customized;
  • More flexibility in leasing than in loans or outright purchases;
  • Well-managed assets;
  • Equipment upgrades easier to do; and
  • Flexible options.

Of course, there are the tax benefits of leasing as well – tax deductions, increased cash flow, write-offs, accuracy in planning and approvals are usually quicker than for other financing options. Here is some of the equipment you might be better off leasing, than buying:

  • Back hoes
  • Cranes
  • Bulldozers
  • Crawlers
  • Crushers
  • Wheel loaders
  • Excavators
  • Cement Trucks

Advantages to leasing

  • You won’t have as much of an initial layout in cost
  • You’ll have access to the latest models
  • Broad range of availability
  • Perfect for short-term jobs

A lot of construction projects may need specific equipment for a short period. Leasing gives you the flexibility to choose the term that is best for your budget and equipment needs.

Another thing to know about leasing – some heavy equipment have long waiting lists when purchasing. Leasing a used piece of equipment is a quick solution.

More perks

  • Leasing is usually fully tax deductible as an operational expense;
  • If the equipment packs up, you’re not responsible for getting it fixed. You’re also not responsible for maintenance. The leasing company takes care of that;
  • Leasing may be a little more expensive, but the flexibility is there without a long-term commitment;
  • Leasing lets you learn more about a specific piece of equipment. A lot of times, it’s a “try and buy” situation. In many cases, a rental agreement can turn into a purchase agreement. The bottom line is that leasing is much less risky than purchasing outright;
  • If you’re a newer company and are not yet very profitable, you may not be able to effectively use the depreciation value of a new piece of equipment, so leasing would just make more sense;
  • Leases aren’t usually cited on a balance sheet, so payments can be taken off as a business expense. Many contractors do bonded work, so not having equipment on a balance sheet can help improve ratios, which bonding, capacity and pricing is based on.

For more information on how leasing can work in your business, contact Truck Loan Center. They’ll be happy to answer any questions you have.

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