Whether you are running a construction business or have just opened your own restaurant, your venture needs many other things besides employees to get up and running. Leasing allows you to purchase the equipment your business needs while spreading your payments affordably across time. With the money you save through heavy equipment leasing, you can take care of those day-to-day expenses, or free up your cash to invest elsewhere. In addition, a lease is not considered a long-term debt or liability, so it will not appear as debt on your financial statement.
Virtually all industries require machinery to function. Heavy equipment leasing companies offer a wide range of products for rent including tractors, air compressors, arcade games, computer software and bulldozers. There are practically hundreds of different types of equipment you can find; chances are there is something for your business.
Leasing also allows you to respond to the needs of your customers faster. Rather than waiting until you have enough money to pay for your veterinary equipment in full, for example, you can be approved to lease it all within mere hours of applying. Leasing also comes in handy when considering computer hardware and software. In an age when computer technology becomes outdated very quickly, leasing the computer software frees you from all ownership obligations, allowing you to upgrade when you need to.
You can also purchase the equipment that you lease, if you like. Many times you will have the option to purchase the equipment for a drastically reduced price after the lease period is over. If you plan to utilize this option, get all the terms and conditions of the purchase specified in writing before you begin the lease. This will allow you to protect yourself.
Leasing also allows you to create a payment plan that suits your business, which is one of its major advantages. You can make payments annually, quarterly or monthly, and if you want to you can adjust payments to be heavier during months when your business is typically busier and lighter during the off-season. Plus, the IRS considers an operating lease to be a tax-deductible overhead expense rather than a purchase, so you are allowed to deduct lease payments from your company’s income.
Heavy equipment leasing is most commonly utilized by construction companies, who depend heavily on large machines such as asphalt machines, excavators and jackhammers to get the job done. Did you know that one excavator alone can cost as much as $200,000? As a result, construction equipment leasing is very popular. According to industry research, roughly $3,401,620,772 of construction equipment is leased every year.
The benefits of leasing are not limited to heavy equipment, either. You can lease, or rent-to-own office equipment such as desks, fax machines, copiers, shredders, computers, computer software and cubicles to complete your office environment more cost-effectively.
You can find a plethora of heavy equipment leasing lenders online. Check into several options to make sure you are getting a good bargain. Because the industry is so large, it’s a good idea to watch out for those shady dealers that might try to scam you. The first rule for protecting yourself is to always be wary about spam e-mails. Second, make sure you know exactly how your security deposit will be applied. Some providers offer non-refundable deposits, and some deposits are not credited to the lease total. The best idea is not to assume that your security deposit is refundable.
Also beware of heavy equipment leasing providers who guarantee to offer you low interest rates because that is something that they cannot promise. If they really offered a great rate to everyone, regardless of credit, they would have to make that money up somehow, possibly by imposing hefty surcharges. Basically, leasing associates can only guarantee monthly payments, purchase options, documentation fees and the total finance amount.
By Kelley Caner