Being a restoration business owner, why would you consider leasing restoration equipment over buying? Everyone knows about the benefits of purchasing big items like houses, cars, and large production equipment. Buying means that once the equipment is paid, it is owned. Money is not leaving the company any longer for that piece of equipment. This takes away from monthly costs and puts the company less in debt. Great idea! But….do you know about the advantages of leasing big items instead of purchasing?
Many people choose to lease items like cars and big equipment before they make the decision to buy. This could be for many reasons.
Cost. Sometimes it is simply much too expensive to purchase a big item like a business van, work truck, or heavy piece of equipment. Restoration equipment is made as a specialty equipment. You cannot run down to your local home depot and purchase a lot of the restoration equipment that professional companies use. For these specialty items, it can be extremely beneficial to lease before making the decision to buy. Many companies will lease as they start up because they don’t have the funds to purchase all new equipment. Leasing gives business owners an opportunity to start bringing in cash before shelling it out on cost for equipment.
Savings. Leasing usually comes with smaller monthly costs than purchasing does. Purchasing big equipment can require a down payment, fees, and then a scheduled monthly payment set up for the rest of the cost of the equipment. When you lease an item, you are only paying for the depreciation of the equipment for the time that you will have it. This is usually significantly less than purchasing and means that more money can go back into the company and into savings.
Top-Of-The-Line Equipment. Notice how fast technology changes and improves. In the time it could take you to pay off one piece of equipment, the industry may have made 2-3 more improvements to the equipment that you already have. That means by the time your equipment is paid off, you’re going to have to purchase new equipment to keep up with the industry and your competitors. Stay ahead of the game by leasing equipment for a shorter period of time and re-leasing new, top-of-the-line equipment.
Tax Breaks. Leasing and rental equipment offer tax breaks because lease and rental payments are tax deductible. Another great way to save money, especially if your company is just starting out and hasn’t quite gotten off the ground yet.
Upkeep. If a piece of equipment is not owned by you…you are not responsible for regular upkeep. Have your equipment maintained and repaired without going broke. Just like any rental, the owner is responsible for maintenance.
One of the best things you can do for yourself and your company is to research your needs, your expenses, and what is affordable for you. Some people can start a full-bodied restoration company without going into debt, but most of us can’t. Starting a company is a lot of work, time, and money and until you start making money, you won’t see the rewards of your hard work. How much money do you have to work with? Where do you want to see yourself and your company in 5 years? What does taking out various loans mean to you? How do you want to handle your debt and your income? Working with a financial company who
Fortunately, you do not have to make all of these decisions on your own. There are professional consultants that can help you understand what it means to purchase or lease brand new equipment in a competitive work force. Specifically, companies like Viking Financial know the in’s and out’s of the restoration industry and what it takes to start and maintain a successful company.
Viking Financial was established by owners with over 15 years’ experience in the finance and lease industry and wanted to offer a service different than the typical bank/lender. We wanted an approach that was customer centered and have options in place that will fit their company needs. Whether you choose us as your lender, we guarantee top tier service throughout the process, no hidden tricks, no hidden costs, just a straight forward honest approach to lending.