Heavy Equipment Financing
Heavy equipment leasing may be a better option to a business than buying. This is because heavy equipment are usually very costly, require applying for a loan and waiting for a while to get approved or not. Leasing is a smart idea for a business that is not ready to commit in buying the asset for the long term plus, there are great pros to construction equipment financing such as tax deductions, write offs, a quicker approval process than applying for loans and good control on cash flow for the business.
Heavy equipment financing companies can lease bulldozers, excavators, cranes, cement trucks, wheel loaders and much more. Construction equipment financing allows the business to keep up with the latest technological changes. This is made possible because the business has not committed to owning the asset over the long term so they can always look for the latest high tech asset that can be productive while at the same time being efficient.
Heavy equipment leasing may be a better option especially in this tough economy where lenders have tightened loaning businesses due to fresh fears of another recession. Buying heavy assets is not advantageous, as the business may have to use all of its working capital to buy out the asset. This leaves it without cash to operate the business, which can see the heavy equipment repossessed due to loan defaulting and the complete loss of the business.
Heavy equipment buying is a big financial move that can hinder applying for other loans that the business may require. Loans to buy office spaces and vehicles may be denied by lenders as they would see the heavy burden on the business, which would make it difficult for the business to meet monthly loan payments.
Borrowing money from a bank to buy construction equipment can be a very frustrating ordeal as banks demand financial statements that show the detail of a business and the process is lengthy with no guaranteed approval. To get a loan advance, the bank may even require that the applicant have collateral, which may be impossible especially if the business is new.
The best way is to apply for construction equipment financing which allows the business to make monthly payments to use the equipment. If there are other better assets out there, the business can close the current lease and apply to use the latest high tech heavy equipment.