When first starting a construction company, there are certain pieces of equipment that you will need. When you are first starting, leasing or renting the equipment from a rental company, like Adams Rental & Sales, may be a better option than buying the equipment outright. The following guide walks you through a few reasons to choose leasing or renting the equipment over buying it.
Leasing or renting a piece of heavy machinery is often less costly than buying a piece of equipment in brand new condition. The equipment may be slightly used, but the company will have put it through extensive inspections before putting it up for lease, so you can rest assured that it will work properly for you when needed.
Pay A Smaller Down Payment
When you lease a piece of equipment, you often do not have to put down as much money for a down payment as you would when you buy a piece of brand new equipment. Since the equipment will be used and you will be turning it back in within a few years, the company often charges less to lease it than they would if you bought it.
Get Easier Loan Approval
When you lease a piece of equipment, having less than perfect credit is often more acceptable to companies that offer loans for the equipment because they know that the lease is only for a certain period of time. If you have a credit rating that could use some work, consider leasing the equipment rather than buying it to better your chances of being approved for the loan you need later.
As your business starts to get more work, you may need to upgrade to newer, better pieces of equipment. Leasing equipment allows you to upgrade to newer pieces every few years, because you aren't stuck with of your own equpiment. This ensures that you are able to work as efficiently as possible at all times. If you were to buy the equipment, you would have to worry about trading it in or selling it when you were ready to upgrade a piece of equipment.
When you choose to lease a piece of equipment, be sure to take the time to determine how much the insurance will be for the equipment and where you are going to store it before choosing one piece over another. You need to be able to afford any storage costs, insurance costs, and the cost for the lease each month and taking the time to determine all costs before agreeing to lease the equipment insures you do not bite off more than you can chew financially. If you choose to rent the equipment, you still need to make sure it can be taken care of while you are renting it and that it is returned on time.