If your business is in need of crane equipment, then you will need to think about ways to acquire it. And instead of trying to use your business funds or taking out a business loan to buy the equipment, you’re better off choosing to rent it. Below are the three ways you can benefit from crane equipment leasing:
- Higher probability of obtaining more credit: Obtaining credit is not an easy task. Creditors look at many factors to ensure that they only lend money to reputable companies that they feel will be able to pay their debt and interest in full. And if they don’t think you meet their criteria, then you have a very slim chance of getting approved for financing. And one of the most important criteria creditors look at is your existing line of credit. If you’ve already racked up so much debt that your debt-to-asset ratios are skewed, then you can forget about getting credit. And this is where leasing becomes beneficial. When you acquire crane equipment through a lease, you are not showing the lease as a debt. As such, your debt/asset ratio will remain intact and look much more attractive to creditors. So if you’re wondering how to finance your crane purchase, consider leasing.
- Include soft costs in financing: When you buy crane equipment, you will not only spend money on the equipment itself, but also additional costs such as transportation, installation, modification, operator training, etc. All of these little costs can add up and eventually become a significant part of the final acquisition cost. And if you plan to buy it through a loan, you’ll have to put up more money on top of the loan in order to buy the crane. But by using a leasing option, you can forget about all those disadvantages, since a lease will cover all the indirect costs. As such, you won’t have to spend a dime on your end to get the machine to your location.
- Get the gear you really want: If you were planning to purchase crane equipment on your own funds or through a loan, then you will be limited by cost considerations. For example, you might like a piece of equipment, but because you don’t have much to spare, you may be forced to pass it up and select cheaper equipment. With the lease, you can forget about those matters. Since you’re not making any upfront investment, you’re literally free to choose any equipment you want. The only limit you have to take into account is the monthly fee. And as long as you can meet the monthly quota, you can get the exact equipment you want no matter how high the price.
So keep the above considerations in mind when thinking about how to finance a tow truck. Remember to check with leasing companies to find out exactly how a lease can help you make your crane purchase.