Landing that major new account or making the big sale that cushions your retirement is the dream of every small business owner. While these might be the end goal you’re working toward, you shouldn’t sacrifice other more incremental ways to save money and trim overhead to improve your margins. One surefire way to cut costs and still grow your business is to take advantage of the benefits available through leasing equipment.
Regardless of the size of your company, leasing equipment lets you avoid forking over a hefty portion of your budget, allowing you to allocate those resources to more important aspects of growing your business, like marketing or purchasing more materials. Increasingly, companies of all sizes and industries are capitalizing on the many benefits offered by leasing equipment.
The construction industry, in particular, has leaned upon leasing equipment. A recent Purchasing.com survey of more than 71,000 CEOs, managers and professionals from across a range of industries found that construction owners overwhelmingly said their favorite financial option was equipment leasing. At 58.6 percent, financing equipment beat out 27.6 percent who said purchasing, 6.7 who preferred renting and 7.1 percent who held no preference.
There are many great reasons construction owners are choosing equipment leasing equipment to find their next big profit.
Reducing equipment downtime
Purchasing equipment can be a major cost burden, especially for smaller businesses that operate on razor-thin profit margins. Without outside financing help, it can take months or even years to save up enough capital to purchase the crucial equipment necessary to take your small business to the next level. Further, once the machinery is purchased, you’re responsible for replacing it if it should break down or need repairs.
Even the best-maintained machines being operated with the highest-skilled workers have a tendency to suddenly go kaput at the worst times possible. A broken crane or busted cement mixer can lead to significant downtime, sending a disruptive ripple through the entire schedule. Suddenly you’re paying workers to stand around. Then the project deadline needs to get pushed back, leading to more cost overruns. Without easy access to replacement equipment or business financing, malfunctioning machinery is nothing more than dead weight on a job site.
Writing in LinkedIn, construction management consultant Paul Netscher said frequent breakdowns of equipment are one of the biggest reasons a construction project ends up behind schedule. It can be tough to turn a profit on the job when faced with constant equipment downtime. By leasing equipment, you don’t have to worry about dipping into different department’s budgets to stay on schedule. With same-day approvals and no down payments necessary, leasing equipment lets businesses in any industry, from construction to dental to offices, stay up and running when the unexpected arises.
Make accurate budget forecasts
Projecting the various line-item costs on your annual budget is a never-ending task of updating and adjusting the actual numbers as they come in. Unfortunately, unexpected events arise that can derail plans and create problems when it’s time to pay vendors.
Equipment leasing offers flexible and consistent payment plans so you can keep track of your financial obligations. With seasonal, quarterly and skip options available, you gain more control and precision when drafting your budgets, allowing you to stay on track to reach your business goals.
When the day finally comes and new orders start streaming through the door faster than your current production capabilities can handle, you need to be able to rapidly respond, adapt and grow. If you’re unable to quickly scale operations to meet an increase in demand, it’s impossible to reach the key milestones necessary to grow the business. And all too often, many times you only get one shot at surfing that wave of expansion into the sunset. Once it’s gone, it’s not coming back.
Leasing equipment provides greater opportunity for maximizing your current resources so you can focus on the other important tasks of scaling operations such as hiring new workers, buying more office space and building up a market presence. With virtually no limitations on types of equipment, you can get the tools you need to seamlessly scale operations and turn a small business into a big one.
Full financing options
Trying to obtain a bank loan to purchase expensive equipment and machinery for your small business can be frustrating. There are piles of application forms, a maze of red tape and, ultimately, the very real possibility that the bank will deny the request or only fund a portion of your capital needs.
Thankfully, obtaining equipment leasing through an online lender means there’s no cumbersome and complex applications to sift through, and a greater chance of having your request approved. Furthermore, these lenders offer businesses the option to defer payment for up to 90 days, giving companies more options for the funding source.