As a small construction company owner, renting or purchasing certain construction equipment can help you get your work done. However, it can be easy to make mistakes that affect your company's finances. Here are some things to remember when buying or leasing construction equipment.
Talk to Your Accountant
There are pros and cons to buying construction equipment, but there are also pros and cons for leasing equipment. While you may have an idea of what you want to do, a visit to your business accountant is in order.
A good business accountant will help you determine what kind of equipment financing makes more sense for your business and help you figure out what time might be best for you to take action. For instance, if your cash flow is projected to increase substantially in the months to come, your accountant may recommend waiting to buy instead of leasing.
Consider Additional Costs
When you think about whether you can afford a particular monthly payment, it is vital to consider additional costs that may affect how much you can afford each month. For example, you might have to purchase attachments for a piece of equipment, which might make you less able to afford large payments over time. Be sure to consider all costs that you might incur before making a final decision.
Check Out the Warranty
It is a wise decision to look at the warranty of any piece of equipment you plan to buy or lease. If you can, try to get a lease or note that allows you to stay within warranty. That way, you don't have to worry about spending so much on repairs, as many of those will be covered by the warranty.
Avoid Taking a Longer Lease Solely Because of a Discount
If you choose to lease equipment, in an effort to pay less in payments every month, you might be willing to take a deal that lasts longer than you may need. Over time, you might end up having to make repairs and store the equipment, both of which might cost more money than you think you'll be saving with lower payments. Be sure to analyze costs to make sure a discount won't hurt you in the long run.
Keep the above tips in mind when you are going to be leasing construction equipment. Be sure to consult a number of equipment financing companies so you can ensure that you get the deal you need. Contact a company like Solution 7 Incorporated to get started.
Share1 October 2015
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