In this six-part series, we are discussing many cost-saving strategies that can help your projects be completed on time and under budget. In the first, second, third, and fourth sections, we covered everything from the bid process to how to manage materials costs. In this section, we will discuss leasing and financing equipment to ensure your budget stays in line on a project. Remember, our Memphis construction attorneys are here to provide you with any legal counsel you require.
Financing and Leasing Equipment
For smaller construction companies that are wary of making significant investments into expensive equipment, financing may be the most flexible and beneficial option. You can work with an equipment financing company that can tailor a specific plan to your unique project needs. Many contractors are not aware that equipment financing is a one trillion dollar industry that is designed to help companies of all sizes with their equipment rental needs.
Here are some other benefits to financing equipment:
- Financing helps avoid the risk and hassles of ownership
- Many financing companies offer zero down payment to begin the process
- You can avoid missing out on technological enhancements in equipment design making your recently purchased equipment outdated
- There can be some tax incentives to financing your equipment
- You can utilize the equipment you need short-term to complete a project
Creating Working Capital
One of the primary benefits of financing equipment is that you can free up cash flow for your projects. This gives contractors the flexibility and working capital to invest that money in other areas of the project that need fiscal attention. Of course, having the ability to coordinate a payment plan for your rented equipment can also be extremely advantageous as well. Instead of paying one sizable lump sum payment, contractors can make monthly or quarterly payments. This can help create a financial plan that aligns with your company’s projects and also helps you manage growth. Of course, you are also not taking on the burden of owning equipment long-term as well.
For more information on cost-saving strategies in construction, please read section six.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.