The heavy equipment can be quite costly and all the business owners, project managers and general contractors know this. Any company should discuss and weigh out the benefits and the potential financial risks of acquiring the new or used equipment before they make any big decisions. And just like all the other large capital investments, every single detail of the transaction or transactions should be well accounted for and double checked so that there are no mistakes that will complicate matters in the future. When any business especially construction business need to acquire the new or used equipment then everyone that is involved needs to know the available and best options are. This is because the heavy equipment tends to depreciate every single time it is used and with the older it gets. So as to save money and preserve the credit lines, many different construction companies tend to opt in financing their heavy equipment instead of making a cash purchase or even in some cases taking a business loan.
MAKE SURE YOU DETERMINE YOUR EQUIPMENT NEEDS.
This is the first step you should take so that you are able to determine what exactly your construction equipment needs are. Know and determine that which you are trying to achieve and what kind of equipments you will require to do this. Make sure you look a your current situation and the upcoming construction projects to see if it will make any sense for your business and for the financial perspective and whether to invest in the new or the updated equipment. Begin by estimating the duration or time period the equipment will be useful for the construction company and how its expected lifecycle will be.
CHOOSING THE RIGHT EQUIPMENT LEASE PROGRAM
You need to research and know the types of equipment leases that are available so as to know how to finance your new construction equipment. The fair market value leas and the dollar buyout lease are two most common types of leases that are available. With the fair market value lease it allows you to either return the equipment at the end of the agreement or maybe purchase it for the market value that is currently in that time. With the dollar buyout lease it allows you to buy the particular leased equipment at the end of the lease agreement but the rates of buying then will be different from the fair market value. The wrap lease, refinance program and the sale lease back are other types of lease programs that one can choose from. Find a lease program that favors you and your construction company.
ARE THERE TAX BENEFITS?
Equipment leasing can bring a positive impact to your construction company in many different ways especially in the company’s financial and taxes. Some of these benefits include lowering of the operating expenses, reducing or even eliminating of any liabilities on the company’s balance sheet and also not accounting for depreciation on the equipment.
HAVE YOU GIVEN YOUR BUSINESS CREDIT A CHECKUP?
When you are going through the equipment lease application then you will go through a credit check. This is a standard procedure that is aimed to help the banks and the independent financial companies determine whether you are a viable candidate for the financing. Many of this equipment lease companies do not require the owners to put down the collateral so it is very important to have a solid credit score. If in your credit report you have any inaccuracies then make sure you have them corrected so as to maximize your credit score as this increases your chances of getting your lease approved.
You have to do a lot of research on the equipment leasing companies so that you know which of them offers the most favorable lease program. Seek recommendations from other companies so that you know their different experiences with the equipment-leasing firms. Do not walk in blindly as this can cost you so much due to sheer ignorance.
Written by Lindsey Rentals. Lindsey Rentals offers the best service and equipment rental in Columbia, MO has to offer!