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Leasing Construction
Equipment Is Smarter
Leasing construction equipment rather than financing
maximizes your working cash and ultimately saves you money. How?
1.
Capital conservation. Every time your company acquires equipment, you are
financing the cost even if you pay cash. If you pay cash, you lose the use of
that cash, the income it provided, and the security of having it available if
tough times should arise. A law of business says, "Don't put your cash in depreciating
assets." Leasing allows you to pay off the equipment as income is earned from
its use.
2. Longer term, lower payments and no down payment. Equipment
can often be leased for a considerably longer period of time than conventional
bank financing, affording a lower monthly outflow of cash. Leasing requires no
down payment, financing 100% of the cost and sometimes more! Sales tax, installation,
delivery, maintenance agreements, and training can be added to the lease if desired.
3. Non-bank leasing frees-up your credit line. Many business people count
on their bank credit line, not realizing that the limit is reduced by the amount
of equipment leases they've done with the bank's leasing department. Commercial
credit and leasing are frequently different departments within the bank, so it's
easy to assume that the commitments made by each are separate and cumulative.
That's rarely the case. Successful money managers plan ahead and establish multiple,
unrelated credit sources, turning to independent, non-bank leasing companies for
their equipment needs.
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