Leasing construction equipment is smarter
Leasing construction equipment rather than financing maximizes your working cash and ultimately saves you money. How?
1. Capital conservation. Every time your company acquires equipment, you are financing the cost even if you pay cash. If you pay cash, you lose the use of that cash, the income it provided, and the security of having it available if tough times should arise. A law of business says, "Don’t put your cash in depreciating assets." Leasing allows you to pay off the equipment as income is earned from its use.
2. Longer term, lower payments and no down payment. Equipment can often be leased for a considerably longer period of time than conventional bank financing, affording a lower monthly outflow of cash. Leasing requires no down payment, financing 100% of the cost and sometimes more! Sales tax, installation, delivery, maintenance agreements, and training can be added to the lease if desired.
3. Non-bank leasing frees-up your credit line. Many business people count on their bank credit line, not realizing that the limit is reduced by the amount of equipment leases they’ve done with the bank’s leasing department. Commercial credit and leasing are frequently different departments within the bank, so it’s easy to assume that the commitments made by each are separate and cumulative. That’s rarely the case. Successful money managers plan ahead and establish multiple, unrelated credit sources, turning to independent, non-bank leasing companies for their equipment needs.