Heavy equipment leasing is very common in the construction sector, where contractors have to purchase exceptionally expensive machinery to accomplish various projects. This cash that they are paying out for an item of machinery that will depreciate in value as it’s used. For clean up after fires consider Dumpster Rentals for a cheap safe way to dispose of the construction waste in Lancaster PA.
While the contractor cannot operate without this expensive machinery, they also don’t want to shell out a large sum of their working capital to complete the job. The answer is heavy equipment leasing, which eliminates the risk associated with a large capital investment.
Prior to starting looking at how to go about achieving this type of financing and what’s involved, you need to determine the several types of leases available and the benefits that you get to enjoy when considering this financial option.
Once you locate a company that can provide you with the financing you need, you will have to determine what form of lease is the best choice for you personally and your business. Some of the most common options include the fair market value lease, which allows you to purchase the machinery for a reasonable market price at the end of the lease or return it.
Another option is the buy for one Dollar lease. These leases let you pay fixed monthly amounts over a group period of time and once the lease ends, you have the ability to buy the machinery for one Dollar.
Then there is the sale leaseback option, which is a great opportunity if you have already invested your capital in the machinery you need and now you need money in a hurry. This enables one to sell your equipment with the agreement that you can lease it back at an agreed rate. This often used to raise capital to complete a project.
Heavy equipment leasing offers a host of benefits with the main benefit being the reduction in risks. In the event that you were to purchase the high priced machinery without a lease, you might be responsible for the maintenance of the machinery, along with having to pay a large amount of your capital, which may be put towards paying salaries and other expenses. It can leave you cash strapped, where in actuality the lease agreement offers you financial freedom and flexibility.
You are able to improve your cash flow by choosing this option. You can budget your payment schedule accordingly, freeing up the cash you would have spent to use elsewhere in the commercial.
One of the biggest problems faced in the construction industry in the management of machinery. You may have two diggers and some other items, but as you take on more and more projects you may find that you require other machinery that you don’t current own along with your two diggers are sitting in a yard collecting dust. With heavy equipment leasing you only have to have the machinery you need on hand constantly, it’s a great way to reduce the danger of having idle equipment you do not need, but is trying out space and costing you money.