From computers and software to heavy machinery and compact tools, construction companies need high-quality equipment for day-to-day operations. But purchasing equipment out of pocket can take a huge chunk out of your working capital, which could eventually hurt your business. Construction equipment financing helps you procure cutting-edge equipment that’s essential for your construction projects. So if you need forklift repairs by going here, you can see how to get financed and get what you need when you need it to continue on with your current construction.
There are two different types of equipment financing: equipment loans and equipment leases. Both of which can provide your business with the equipment you need.
With an equipment loan, lenders provide you with the working capital needed to purchase the equipment. You don’t have to pledge any business or personal assets because the equipment you’re looking to buy serves as collateral for the loan. At the end of the repayment term, you’ll own the equipment.
On the other hand, equipment lease works similar to leasing an apartment or a car. You don’t own the equipment; you’re just renting it. At the end of your lease, you often have the option to end the contract, renew it, or purchase the equipment. When you reach out to a plant hire in the Hull area (or wherever the construction is happening), renting the equipment is most likely the route you’ll be taking.
If you’re looking to apply for equipment financing, here’s how it can help your construction business.
1. Preserve Working Capital
Capital preservation is one of the main reasons why business owners apply for equipment financing. Tying working capital in expensive equipment may pose financial risks for small- to medium-sized construction companies. By choosing to finance construction equipment, you can minimize the risk of uncertainty that comes with investing in expensive equipment. In this way, you’ll be able to preserve working capital to pay for daily business expenses such as buying raw materials, making payroll, or training staff.
2. Avoid Obsolescence
Equipment leasing can help manage obsolescence. As technology evolves, so does the equipment you’re using. Construction technology and software can easily become outdated. With an equipment lease, you won’t risk owning useless, outdated equipment. Some lenders can even help facilitate trade-ups, where you can trade in outdated equipment in exchange for a new one to ensure your business has the appropriate piece of equipment.
3. Increase Productivity
When used wisely, equipment financing can greatly boost productivity. For instance, purchasing additional machinery or heavy-duty equipment can help speed up the project. By improving productivity, you can complete the project faster, get paid, and then take on new clients. This allows you to generate more revenue, boosting your bottom line. With that said, equipment financing is an investment that enables your business to become more profitable in the long run.
4. Immediate Funding
Another benefit of equipment financing is the speed of funding. This type of financing is completed faster than traditional loans. If you’re looking for even faster funding, you can apply for equipment financing from alternative lenders. Alternative lenders are non-bank lenders that offer small business loans. The entire loan application typically happens online and it won’t take more than 10 minutes of your time. The approval and funding for alternative equipment financing are between 24 to 48 hours.
5. Updated Technology
It’s no doubt that the construction industry is competitive and order to stay in the market, it’s important to establish a competitive advantage. One of the ways you can do so is to have the latest construction equipment. Unfortunately, not a lot of contractors are financially capable to buy the equipment necessary to remain competitive. By funding your equipment purchases through leases or loans, you’ll have the capital needed to acquire the latest equipment that would otherwise be out of reach.
6. Accurate Financial Forecasts and Cash Flow Management
Whether you choose a loan or a lease, lenders will likely ask you to pay fixed monthly payments. In this way, you can manage cash flow better by making more accurate budgets and financial forecasts. A reputable lender can tailor the repayment schedule with the cash flow of your construction company, ensuring better financial management.
Discover Equipment Financing for Your Construction Company
If you’re looking to apply for a loan specifically to purchase construction equipment, equipment financing is the best loan for you. SMB Compass offers different types of loan products suitable for every need, including equipment purchases. To know more, call us NOW at (888) 893-8922 or email us at info@smbcompass.com and schedule your free consultation.
