Why It Makes Sense to Lease Heavy Equipment?

Without the proper tools, your employees will not be able to do their duties if you are the owner of a construction company. But it's not always feasible to spend thousands of dollars on new or old equipment. Leasing heavy machinery in Abbotsford is the best choice in such case.

Construction equipment can be acquired more affordably by leasing rather than buying it outright. Leasing heavy machinery is categorized as either an operating or capital lease. A capital lease typically contains a nominal lease end buy option along with full payout. You are in for of maintaining the equipment under this lease, as well as paying all associated taxes and insurance.

Heavy Equipment


What are the benefits of leasing heavy equipment?

Leasing heavy machinery is meant to increase output and profitability. You can build up credit lines and save money by minimizing upfront costs because you just pay to utilize the equipment rather than buying it completely. 

    1. Fair Market Value 

One of the most popular forms of financing for equipment is an FMV lease. The equipment can be leased for a few years, after which you typically have the choice to either buy the equipment or return it. 

For large equipment that depreciates rapidly, FMV leases are a great option. You can upgrade without suffering large losses if the equipment's worth has decreased at the conclusion of the lease.

    2. Dollar Buyout Leases

One kind of capital lease is a dollar buyout lease, which has a longer lease period and a higher monthly payment than a fair market value lease. You will be able to buy the equipment for just $1 after the leasing period is over. 

Dollar buyout leases, which function as a cross between a loan and a lease, are frequently utilized for equipment that maintains its worth over time. Although you own the equipment and it shows up on your balance sheet like a loan, you might be able to secure 100% financing with no down payment and fixed payments like a lease. 

    3. Wrap Leases

 All of your current and new leases are combined into one handy package with a wrap lease. It adds any more equipment you need and consolidates existing leases into a single contract. 

You will have fewer paperwork to handle as a result. Additionally, instead of managing several monthly payments, you will only have to make one lease payment. 

 4. Sales and Leasebacks

When buying equipment, capital funds are frequently committed, and loans must be repaid over a number of years. You can't constantly postpone your capital purchase requirements for this long, though. If so, you may need to turn a purchase into a lease.

If you have brand-new equipment, you might be able to sell it to another business by doing a "sale and leaseback." After then, you can return the equipment lease and continue utilizing it for the project. 

Conclusion 

Leasing heavy machinery is a fantastic method to reduce the cost of equipment for your construction company. Consider your future projects, assess your equipment needs, and think about if leasing is the most cost-effective choice for you before making your final decision.

If you are looking for a reliable equipment leasing company in Abbotsford and Surrey, Sandhu & Sran Leasing & Financing is the name to trust. For past many years, we are proudly helping small and mid-sized business owners in getting access to quality equipment at low installments and competitive interest rates. For more details, give us a call today.

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