5 Advantages of Leasing to Finance Your Heavy Equipment or Trailers
Good news! You’ve gone into business and your company is growing. Now you need to think about acquiring a trailer to continue your growth.
Did you know that financing heavy trucks or trailers through leasing has become the preferred financing solution for many companies? Whether it is to transport construction, excavation, logging or other equipment, investing in trailer equipment can be substantial. To make it easier for you to access the quality equipment your business needs, such as heavy-duty trucks, consider Affiliated Financial Services. With 45 years of experience, we can advise you on your organization’s equipment needs.
Read on to discover how effective this business solution can be and the many benefits of leasing your transportation equipment.
1. Better cost control with heavy truck or trailer lease financing
You only need to compare monthly lease payments to the amortization and interest fees of a conventional loan to see the difference and financial benefits.
You will also find that your overall monthly expenses will generate a higher profit. In other words, leasing your next trailer is a great way to finance your business.
2. Better protection of working capital
Entrepreneurs in all fields know the importance of protecting their working capital. Heavy truck lease financing eliminates the need for a down payment as is usually required with a conventional loan.
When a company purchases transportation equipment, it must immediately make a cash outlay at the time it makes the loan. Leasing trailers avoids this cash outflow because the company only pays lease payments over time and the asset remains the property of the lessor until the end of the contract. In this way, leasing allows the company to maintain its current accounting position by avoiding the need to record a debt on the balance sheet.
3. A better balance sheet with transportation equipment lease financing
As mentioned above, lease financing for your trailer or transportation equipment represents a monthly expense, as your company will be making lease payments over time. Since the acquisition does not appear on the balance sheet as a long-term debt on the liabilities side, your debt-to-equity ratio will not be affected. Thus, the leasing method allows your company to keep all its borrowing capacity.
In addition, you will be doubly advantaged since this method of financing also allows you to deduct the rent paid to the lessor for tax purposes. As a result, your company will reduce its taxable base, which will also result in a reduction of the tax due on the company’s profits.
4. Lease financing for heavy trucks gives you more choices
Leasing allows you to eventually purchase your asset, in this case your trailer equipment, at the end of the lease. Or you can otherwise return the transportation equipment to the leasing company at the end of your contract.
Also, depending on the options in the financing contract, you will have the option of renewing the trailer lease and leasing it again for a specified term. To learn more about financing with leasing, do not hesitate to consult our section by clicking here.
5. Meet demand with your trailer equipment
Since the cost of purchasing heavy truck or trailer equipment through traditional acquisition is considerable, lease financing is the ideal, practical and affordable solution to meet a rapid increase in your customer base or to manage seasonal demands. In addition, it allows you to quickly obtain the latest generation of transportation equipment that complies with regulations, allowing you to offer your customers state-of-the-art services without incurring a major immediate expense on your balance sheet.
At Affiliated Financial Services, our expertise in the purchase and financing of all types of trailers will allow us to help you select the optimal equipment for your business.
Heavy-duty truck equipment that meets your expectations and goals
For the acquisition of a new fleet or for a more recent trailer, lease financing saves you from having to pay high maintenance costs. Also, when it comes to trailer equipment, one of the biggest challenges as a contractor is trying to anticipate the standards that your trailers will have to meet in the next few years. Lease financing allows you to avoid this stress by choosing newer equipment to suit your needs while ensuring that you meet current trailer standards. To read more about trailer equipment financing, visit our page.
However, there are no one-size-fits-all solutions when it comes to buying or leasing trailers. That’s why our dedicated team at Affiliated Financial Services can guide you through the trailer financing process tailored to your company’s unique needs. We’ll work with you to find the right solution for you. Apply for financing today with one of our brokers and get one step closer to achieving your business goals.
