Posted by Nikki Wardle on Nov 29, 2016 9:00:00 AM

buy rent lease

These options are critical considerations for construction businesses, especially in the current market. The 2008 recession changed the way the market operates and how financing is handled, as well as severely impacted the construction industry from top to bottom. While the sector is currently climbing its way back to a stable market uncertainty is a big concern.

That uncertainty can cause a lot of stress and anxiety at times of significant equipment demands. When the market is as soft as it has been you, need to be able to take jobs as they come up, and that requires the ability to accurately estimate your costs and be in a good position to bid a project. Considering the options of leasing, renting, or buying your next equipment piece can make the difference between a quote built on a solid foundation, or one that is a little shaky.

Renting

Renting can be a very appealing option for some firms that have short-term needs for their equipment or are interested in trying out a new piece for their fleet. Renting can be very cost-effective as you rent for a fixed rate, maintenance is handled by the owner of the piece and the demand for renting is high which means rental prices are lower than previous time periods.

Buying

Buying has some distinct advantages for purchasers, but they may not apply to your particular situation. Buying has pros and cons and should be considered with your business in mind. While you can use depreciation to lower your taxable income, your balance sheet takes a hit with the liability which may make you less attractive to other lenders. Also, if you buy a piece of equipment, you are committed to its technology and banking on it not becoming obsolete in the foreseeable future. Buying can be a great option, but be sure to consult your tax professional for a real analysis of your circumstances.

Leasing

Leasing has become a standard option for large equipment purchases lately as cash flow has been tight. Leases are helpful due to little or no cash requirements at the time of purchase, a fixed monthly cost that you can budget for, and you can upgrade or purchase at the end of the term. The flexibility with a lease can be very attractive, as well as the implications for your balance sheet. A lease is considered off-balance in that it does not reflect itself as a liability on your balance sheet.

Still think there are no financial benefits to leasing? Think again.

Choosing the Right Leasing Agent

If you make a choice to lease your equipment then choosing the correct leasing agency for your industry and business is crucial. Brahma Lending has years of experience in large equipment purchases and financing so they are aware of the unique costs to construction equipment that other agents may not be aware of, and we have clients anywhere from A to D credit and specialize in off-balance financing. We can get you financing that works for your business and gets you the equipment you need to start your next project.

Nikki Wardle

Written by Nikki Wardle

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