For companies that rely on heavy equipment, these assets are a critical part of their business. And yet for many of these companies such as those in the construction industry, cash flow is often season. That is why it is so important to find the right heavy equipment loan that meets the needs of your business.
USES FOR HEAVY EQUIPMENT LOANS AND LEASES
Heavy equipment signifies a huge investment for your company and yet without this vital equipment, your company would not be able to operate or compete in your industry. When companies are looking to replace or add to their inventory, a heavy equipment finance allows them to obtain the machinery that they need right away rather than having to wait to ensure they have the necessary cash balance. Companies pay off their heavy equipment loans in installments while they put their equipment to use right away to help improve their bottom line.
Another reason you may wish to get a heavy equipment loan for your company is to fund maintenance and repairs to the heavy machine that you already have. Some companies may see a better return on their investment by extending the life of the equipment that they already have. This type of heavy equipment finance is usually paid out by the lender after such repairs or upgrades have been made.
ADVANTAGES OF HEAVY EQUIPMENT LOANS VS. LEASING
Companies can realize a number of benefits from both loans and leasing. The best option for any particular company will depend on your company’s goals at any given time.
Advantages of loans
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When the company owns the equipment, they are building equity as they pay off the loan.
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Assets may be depreciated on balance sheet.
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There is no restriction as to how many hours and wear that can be put on the machine.
Advantages of leases
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The company can pay less upfront for the equipment.
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Generally speaking, the payments with leases are lower than they are with loans.
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Companies have the ability to deploy cash reserves elsewhere.
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Equipment can be returned at the end of its use or companies may exercise a purchase option.
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Enjoy greater flexibility and possibly easier scheduled replacement of equipment.
OUESTIONS TO CONSIDER WHEN DECIDING BETWEEN A HEAVY EQUIPMENT LOAN OR LEASE
When determining whether a loan or a lease is the best option for your company, ask yourself the following questions:
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How long is the equipment needed (is it equipment that your company will need indefinitely or is it for a specific project?).
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Is it important for your company to keep up with the latest technology on this piece of equipment?
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Are you more concerned about the interest rate or the total cost?
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Are you simply looking for the lowest payment option?
HOW A COMMERCIAL HEAVY EQUIPMENT LOAN WORKS
A heavy equipment finance or loan is a secured loan. This means that the lender can take back and sell the equipment if you fail to meet the repayment terms. Heavy equipment loans work similarly to vehicle loans in this respect.
WHY CHOOSE STELLAR LEASING?
If you are looking for heavy equipment loan, working with Stellar Leasing offers many benefits including:
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Fast and flexible heavy equipment finance options including lease to own and sale and leaseback.
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Expert advice of the best type of heavy equipment loan for your company and goals as well as advice on possible tax benefits for your company.
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Responsive and friendly customer support services.
If you are looking for heavy equipment financing for your company, we are here to help. Contact us today to get started.
