The equipment market has faced significant disruption due to supply chain issues and high prices. Business owners had to consider selling or trading their equipment to manage the costs of scaling their businesses.
This situation complicated matters for contractors and rental companies seeking to upgrade their fleets. To address the unexpected financial challenges associated with purchasing new equipment, savvy business owners opt for equipment financing. Considering that approximately 79% of businesses utilize financing when acquiring equipment, it’s a logical opportunity to seize when expanding your business.
How Equipment Financing Is Different
Regarding construction equipment, companies have the decision of either buying equipment or renting it. Although purchasing equipment does provide businesses with the advantages of ownership — such as tax benefits and long-term savings — renting is more flexible. This is especially beneficial if you have short-term projects to handle.
Several factors must be taken into consideration when it’s time to decide whether to buy or rent construction equipment. You should consider your financial capabilities and need for specific equipment in order to determine which option will work best.
Equipment financing is different from other business financing because it allows companies to get the necessary machinery with a short waiting period for approval. The down payment required for equipment financing is generally cheaper than what is required for the upfront cost of machines, allowing you to get the equipment you need without breaking the bank.
The Benefits of Equipment Financing
Financing new equipment also improves your business credit by demonstrating your reliability in making payments. As you fulfill your financial obligations and avoid late payments, your business credit score will rise.
Additionally, financing offers the flexibility to customize payback arrangements, allowing you to structure payments according to your business needs. This can be particularly advantageous for seasonal businesses.
PEAC Solutions offers a quick approval process; you could potentially receive the green light for equipment financing within a day. By keeping up with the fast-paced business environment and leveraging financing opportunities, you can position your business for success and seize industry opportunities.
Why Equipment Financial Is the Solution for You
For companies in the construction industry, financing allows your business to maximize and preserve working capital, which is particularly crucial as equipment acquisition costs rise and supply chain constraints cause delays. It is undeniable that equipment financing provides convenience and speed, ensuring fast access to capital without significant financial burdens or upfront cash outlays. Matching the financing duration to the life of assets also enhances your company’s debt structure, increases bonding capacity, and allows for efficient equipment lifecycle management.
When determining whether to rent construction equipment instead of purchasing it, there are a few things that you need to take into consideration. This includes:
- Usage Frequency. Assess how frequently you will use the equipment. There are advantages to renting construction equipment for sporadic or short-term needs, while buying is suitable for regular and long-term usage.
- Financial Resources. Evaluate your finances against upfront costs and consider financing options or leasing to alleviate immediate financial burdens. A cost-benefit analysis for construction projects can provide better insight into which option might work best.
- Future Use. Consider whether the equipment will be used in future projects. There are advantages to buying construction equipment if you intend to use it for multiple projects. This can eliminate continuous rental fees for equipment that you do not own.
Equipment financing is an effective way to grow your business without tapping into cash reserves, and PEAC is here to help guide you through the process and provide you with a tailored solution.
If you’d like to learn more about equipment financing, reach out to us today! You can also submit a quick and easy financing application to get started right now. We look forward to helping you unlock new opportunities for business growth.
PEAC Solutions is a DBA of Marlin Leasing Corporation. Equipment financing is provided by Marlin Leasing Corporation.