If you're a small start-up company in need of heavy equipment, the money you need to buy bulldozers and backhoes may simply not be available. Over-extending yourself in your first year or two of operation can put you at risk of bankruptcy before you've even had a chance to stretch your corporate legs. But if you've done research prior to hanging out your shingle, you're aware of the many benefits that leasing equipment has over owning it. Heavy equipment leasing is one of the best ways to gain access to the vehicles you need without going broke in the process. If this is your first time leasing heavy equipment, use this handy guide to walk yourself through the process.
1. Decide Whether a Heavy Equipment Lease is a Good Idea for You
There are both pros and cons to leasing heavy equipment, but for small businesses who can't afford to pay outright, it may be your only viable option. Benefits of entering into this type of agreement include:
The disadvantages are there too -- becoming tied to a leasing company for an extended period of years whether you continue to use the equipment or not is a big one. And just like any other loan, the cost of paying in installments over a period of years may actually add up to more than the cost of the equipment. But for most start-up business owners, a heavy equipment lease is a good option when you simply must have access to earth-moving equipment and you lack the necessary funds to simply go out and buy it.
2. Apply to a Reputable Leasing Company
Your next step is to find a reputable heavy equipment leasing company and fill out an application. Often it's possible to apply online and hear back within hours.
3. Negotiate a Workable Payment Plan
It's generally not necessary to have a down payment ready when you're entering into a heavy equipment lease, but if you do have the money available, this will help lower your monthly payments. Make sure you work with the leasing company to negotiate payment terms that you can afford. It's not necessary to take the first option they give you. Haggling over the length of the lease, as well as the monthly payment amount, is an acceptable business practice. Don't be rushed into signing a lease that you don't feel good about.
4. Take Possession of the Heavy Equipment
Once you've signed on the dotted line, the equipment you leased will be delivered and off-loaded at your work site. You'll be responsible for hiring qualified operators to run it, however. You'll have access to the equipment for the full term of the lease so long as you meet the monthly obligations. At the end of the lease, you'll have several options available which may include buying the equipment at fair market value, continuing the lease, or ending the lease and returning the equipment.
The most important points to remember when leasing heavy equipment for your start-up is to make sure you understand the financial obligations the lease will place on you and to be sure to deal with a reputable leasing company. If you follow this advice, your heavy equipment lease should run smoothly.Share
27 July 2015
Hello, my name is Wendy, and I know what it feels like to be in debt. However, I also – thanks to a great financial education, a dad who's an accountant and trial and error – know how to get out of debt. In particular, I understand the pros and cons of getting out of debt using a consolidation or equity loan. If you are trying to get out of debt, this blog will explain the best loans to help you with that process. If you are just thinking about taking out your first loan, this blog will explore which loans are the best, which to avoid and how to know the difference. Debt can feel like a burden, but it is always possible to get out from under it, and in some cases, debt can be the tool that helps you to move forward. Thanks for reading and enjoy!