If you own a construction company one way or another, you’ll need equipment. You may be wondering if it is better to lease heavy equipment, or if you should buy or rent it. There are good points and bad points about each potential choice.
When To Lease Heavy Equipment
You can enjoy some advantages if you chose to lease heavy equipment for your company that is comparable to both buying and renting. Most leases give you access to the equipment you need for at least one year, and sometimes longer. Fewer upfront costs come with a lease than what you would find if you chose to rent or buy the equipment instead. In most cases, no downpayment is needed in order to lease equipment. However, you’ll likely pay a higher interest rate on a lease than you would by renting or buying.
When To Buy Heavy Equipment
The best way to ensure you always have access to the equipment you need is to buy it. However, you should only buy it if your company can weather a depleted cash flow or the use of some of your business credit. It is also important to consider the fact that if you buy the equipment you will have to have room to store it safely and conveniently. In addition, you should be able to afford to have the equipment repaired if there is a need to do so.
When To Rent Heavy Equipment
Flexibility is the biggest benefit to renting heavy equipment rather than leasing or purchasing it. You can rent what you need for a day, week, or month so you don’t have equipment laying around when it’s not necessary. This is also the best option if you can’t afford the upkeep of the equipment you need.
An added bonus is the fact that the company you rent it from will deliver it when you need it and pick it up when you’re done with it. As a result, you can experiment with different models of a particular piece of equipment until you find the one you like the most.
For more information on how to lease heavy equipment, buy it or rent it, please contact KPI.