Potential Benefits of Financing Solutions for Construction Equipment
Construction companies rely heavily on their equipment in their day-to-day operations. Financing equipment may be the best option for them to acquire the essential equipment that they need to operate and drive growth. Here are some potential advantages to financing solutions for equipment expenditures.
Tying up too much of your total available capital on equipment purchases could present an unreasonable strain on your resources. Using financing to purchase construction equipment is going to give you predictable monthly payments instead of large sum costs. This is particularly helpful when you need to get new equipment as quickly as possible in order to complete a project.
Address Depreciation Concerns
Equipment that takes heavy use can depreciate in value rapidly. The money that you put into it may not be nearly commensurate with its resale value. When you insure equipment in accordance with the terms of a financing agreement, getting coverage for its replacement value can offer you an important form of protection.
Insurance benefits that represent the value of the purchase price may not be the best solution for business owners. When they haven’t expended the full value of a purchase price, they need benefits that will enable them to go out and get replacement equipment that they need to sustain their normal operations.
Leasing to Own Equipment Can Offer Repair and Replacement Solutions
A lease that draws out payments of equipment’s fair market value can help companies take full ownership of tools and machinery that another company owns. While they are another company’s property, the dealer or distributor is responsible for various maintenance functions. Under some agreement structures, the supplier must provide fully functional equipment in order to be holding up their end of the bargain with a company.
Keep Your Options Open
Some financing agreements may be transferable, so making a purchase from a dealer that offers direct financing could have important logistical benefits. Alternatively, you could work with a dealership that can help you negotiate partnerships with financial institutions.
Financing companies that serve corporations in the construction industry want to establish an enterprise relationship with their customers in which they handle all or almost all of their customers’ equipment needs. It’s in their best interests to leave room for modification and transferability so that they can continue addressing business’ construction equipment needs cost-effectively as they change over time.
Ultimately, construction companies should review their financing options carefully before entering into long-term agreements. A thorough understanding of an agreement’s key terms can reduce the risk of problems or surprises.