3 Reasons Equipment Leasing Makes Sense for Your Business
Owners of construction businesses need access to a wide range of equipment for their various projects. However, the high cost of machinery such as cranes, cement mixers, bulldozers, and jackhammers can be extremely daunting. Here are some compelling reasons why equipment leasing can be the best path to business prosperity.
When you purchase equipment, you generally have to take out a bank loan to cover the costs. However, businesses that have not yet built up sufficient credit often find it difficult to get a traditional loan. Your business credit score plays little or no part as a factor in the approval process for equipment leasing. As long as you can place a deposit and show that you can make timely payments, you can rent the machinery you need.
Equipment leasing is easier to afford than outright equipment purchase. When you own the machinery, you are responsible for its maintenance and repair, but if you rent it, the leasing company usually takes on these responsibilities. If the rental payments put a strain on your cash flow, you can consider factoring your accounts receivables. Online applications to factoring companies are quick and easy, and you can obtain the funds you need to make rental payments even if your clients are slow to pay their bills.
One of the biggest drawbacks of purchasing construction equipment is that you have to use it for years to make back your investment, even if upgraded models are available on the market. However, equipment leasing gives you access to state-of-the-art machinery that you can upgrade if necessary every time you renew your lease. Additionally, it’s not financially reasonable to purchase specialized equipment that you need only for particular jobs. Instead, you can lease the machinery for as long as you need it and then return it.
For more advice on equipment leasing for your business, look to ASA Capital Funding.