Leasing: The Best Type Construction Equipment Financing
To be successful in the construction industry, you need equipment and materials that work properly, at all times, and won’t let you down. To maximize your business potential and always stay competitive, being on the cutting edge of technology is a must. Luckily, when it comes to purchasing your construction equipment, you have a variety of financing options. You can purchase new or used equipment with more traditional methods such as bank loans or a line of credit, or you can lease. Read on to find out more about leasing, the best type of financing for construction equipment and materials.
Construction equipment financing: lease or loan?
You’re probably wondering what the differences are between leasing and conventional loans. Lease financing is actually a rental agreement that allows you to get the new and used construction equipment you need quickly. Depending on your agreement, you may or may not purchase the asset at the end of the lease term. Some agreements even offer the option to upgrade the machinery during the lease term. At the end of your agreement, you can also choose to renew and purchase modern construction equipment. Given how quickly construction equipment and materials evolve, you will benefit from being able to modernize your equipment without hassle and without affecting your borrowing capacity again. This will ensure that you get the best equipment without any financial loss.
In addition, unlike a loan, relying on leasing to finance your construction equipment generally does not require a down payment. A significant advantage considering the cost of some construction equipment is quite high. As such, leasing lets you keep your capital as working capital, or invest it in other ways to develop your business.
Unlike loans, however, construction equipment and materials acquired through lease financing cannot be included as an asset or liability on your balance sheet. But you can deduct the full monthly payments as an expense in your income taxes. Moreover, sales taxes on these monthly payments can also be deducted, another major tax advantage.
You should also be aware that it is generally easier to apply for lease financing than for a loan to obtain the new and used construction equipment your business needs. Depending on your situation, you may not even be required to provide your complete financial information. This makes the process simpler, faster, and much more efficient for you and your company.
Easy, customized financing for modern construction equipment
Whether you need a scaffold, crane, skid steer loader, demolition equipment, hoist, compactor, wheel loader, or other new or used construction equipment, lease financing allows you to purchase the construction equipment that is essential to your business. The term of the lease is flexible and pre-agreed. It can be adjusted according to your capacities and needs. Then, the payments and interest rates are fixed. This simplifies your budgeting. What more can you ask for?
Whether you are starting your construction business or want to modernize your current construction equipment with a simple, efficient, and advantageous financing method for your business, leasing represents the financing solution adapted to your needs, your reality and your objectives. With this type of financing, you can purchase a new or used mixer, excavator, hydraulic equipment, or any other construction equipment.
For over 45 years, the experts at Affiliated Financial Services have been happy to assist construction contractors in acquiring their equipment and work materials, always with the goal of finding the best financing solution. If you have any questions or would like to request information about leasing, contact one of our Affiliated Financial Services brokers today.