6 Tips for Equipment Financing in the Construction Sphere
Construction related businesses typically need lots of costly equipment in order to operate. However, purchasing equipment does not have to be a barrier to getting your new contracting or construction business up and running. Equipment financing from alternative, non-bank lenders is an excellent option to consider, in order to meet your heavy equipment needs.
Equipment financing could benefit your construction business if you want:
- Customized, flexible repayment terms: Equipment financing can be arranged to suit your tax situation and cash flow requirements. Some construction equipment leases offer lower payments during the slow season or when a big project is just getting started (when you’re not earning money from the equipment).
- To conserve your business capital: Paying up front for construction equipment could eat up money that you need for other things, such as staffing your business, advertising to attract leads and running your business day to day. Consider equipment financing instead.
- Lower investment risk: Buying equipment outright can be risky, especially for a smaller business–because what if the equipment becomes obsolete, or isn’t supported by an increase in business? Through equipment leasing, you could arrange payments that make sense for the amount of use the equipment gets.
- Predictable business expenses: It’s much easier to plan for future business needs if you have consistent expenses every month or quarter. Equipment loans or leases can be arranged so you can take depreciation off your taxes (a full pay-out lease or loan) or make lower payments (an operating lease). Leases offer lower costs over the predicted usage period, while an equipment loan can offer a consistent, fixed payment amount over the useful life of the equipment.
- The latest tech: To stay competitive, you need the best, most effective and productive equipment—and constantly buying new is not feasible. Through leasing or term financing, you could get higher-end equipment, and/or keep upgrading (affordably) to the latest and greatest.
- Equipment expertise: Lenders who specialize in construction equipment financing often also have valuable connections with distributors or manufacturing companies. The experts can also help by managing upgrades, sale of old equipment, etc.
To learn more about construction equipment financing, contact Approved Business Lending today.