Leasing heavy equipment for your construction business is a choice that you have to weigh against renting or buying outright. Each method for getting your hands on the equipment involves some pros and cons. But leasing comes with quite a few benefits that you should consider before you make a decision.
1. Leasebacks for Heavy Equipment
If you need to raise some capital, you can sell a piece of your heavy equipment and then lease it back. The benefits of this are innumerable.
- Get funds you need while using the equipment you're familiar with
- Get a good price on equipment you planned to sell anyway, but still had a small use for
- Get rid of the added cost of maintaining a piece of heavy equipment while still making use of it
Of course, the main benefit is the immediate cash that you can then use to invest in something else. Leasebacks are great, but not something you should do without figuring out if it's worth it. If you will end up paying all the money you received for leasing the equipment, you have to make sure it's worth your while.
2. New Equipment When You Need It
Heavy equipment isn't cheap. When the new thing rolls onto the block and you desperately need it, a lease is the answer. Leasing new equipment usually comes with a warranty. That means that you're not on the hook for fixing and maintaining the new piece, or at least not fully on the hook. Leasing new equipment will save you money. It will also make your business look more progressive and attractive to potential clients.
3. Spreading Your Funds Around
Leasing can free you up to do other things with your money. Instead of buying a piece of equipment outright, you can lease it and use your funds to start other projects. When you think of a lease as the loan it really is, you can start to see how you can benefit the most from it. Meanwhile, all that money you were going to spend on a new piece of equipment, you can use instead to grow your business.
4. Future Options
When a lease is up, you will likely have three choices.
- Give the equipment back
- Renew the lease
- Purchase out the equipment
Each of these options can represent a benefit to your business. It all depends on what you want to do. If you plan your lease right, you will be in a position to take advantage of any of these three options when the lease is up.
Study the Fine Print
While leasing is an excellent option for your business, it's not something that you should jump into without doing your homework. There are different types of leases, and different types of lessors. Always know what you're getting into, and always study the fine print of any lease agreement. In addition, you need to know your company's finances inside and out. Leasing is not a decision to make lightly. Speak to a professional heavy equipment leasing service such as Westar Financial Inc about your options.