As a decision-maker in the construction industry, weighing all
equipment acquisition options is a critical aspect of the job -
especially given today's fluid marketplace.
With construction equipment leasing you don't have to worry about the
overhead of the purchase while keeping your cash accessible. No matter
how big or small your project you can always find leasing options from
the financial institutions who specialise in this type of product.
Plus, payments you make under an operating lease are tax deductible.
65% of the top businesses lease equipment, according to an ELA survey.
The top reasons these businesses cite for leasing include consistent
expenses in budget management, increased cash flow, and the ability to
have the latest equipment.
As businesses prepare to compete and grow in a new millennium, many are
searching for proven new ways to address their equipment financing
needs. And the choice for an increasing number in construction is
clear: equipment leasing.
If structured properly, as a "true" lease, construction equipment
leasing has some very important tax benefits. The payments can be
considered a rental resulting in a 100% expense write-off. At the end
of the year you would simply total your payments and deduct them
entirely as an expense. This is a much more rapid write-off than
interest expense and depreciation.
Most leases do not have to be shown on your financial statement as a
liability, since theoretically it is a contingent liability, and only
has to be shown as a footnote. This keeps your financial statement from
becoming overloaded with debt and is important if your bank lines
require maintaining certain ratios.
The biggest benefit, however, is that you can get the most money with
the least information.... Up to approx. $100,000 with a single page
application!
For many in construction equipment leasing makes perfect sense.
Especially when you consider the upside: Leasing allows you to keep
your machine stock flexible. When your work changes, your machines can
too.
It provides a planned schedule for equipment replacement, helping you
run newer, up-to-date equipment so you'll have less downtime. It
generally requires smaller amounts of money up front and monthly
payments on your construction equipment leasing are generally lower
than installment payments, thus freeing up cash and increasing the
liquidity of your assets. And it doesn't lock you into a long-term
commitment to purchase.
It would therefore be wise for any business executive to investigate
the advantages to equipment leasing in order to make the best use of
current financial resources.
Con Quimper has worked in the construction equipment industry and
academia in South and Central America since 1986. His teaching and
research interests focus on construction equipment, contract
administration, and contract dispute resolution. He is a consultant to
various companies in these areas. Visit his information website at: www.constrution-equipment.info
