Should You Buy or Lease Heavy Equipment?

In the current marketplace, many businesses are left with a difficult decision as it pertains to their heavy equipment needs. Do you purchase the equipment outright or go for heavy equipment leasing instead? For any company to be successful, now more than ever before, it is vital that you have the appropriate equipment available to use when you need, as well as at the right price.

Today, seemingly any piece of heavy equipment can be purchased or leased, irrelevant of how specialized it might be. While previously, business owners may have been wary about the prospect of heavy equipment leasing due to perceived risks or uncertainties, nowadays, more and more companies are choosing this route over the more traditional way of acquiring equipment. So, why is this the case and what are some of the main differences when it comes to equipment leasing and purchasing?

Why Do Companies Purchase Heavy Equipment?

If a company or contractor has the capital to spare, purchasing the relevant heavy equipment they need might be considered appropriate. The benefit of doing this means that as a company, you have constant availability regarding a piece of equipment, and it is ready to be used at any time.

Purchasing instead of equipment leasing can also benefit your employees and operators who will be able to learn and master one specific machine, as opposed to understanding a number of different ones. Therefore, this will likely lead to a greater level of workplace productivity and, ultimately, a healthier bottom line.

As mentioned earlier, capital is the first and foremost issue. After purchasing a machine, the business is then responsible for everything relating to it; from transportation and storage to maintenance and repair, which when applied to heavy equipment can become incredibly expensive. The initial cost should not be seen as the final payment as there will be a whole host of other associated ones when owning equipment outright.

One other important factor to consider is the project length or the amount of jobs you need it for. For short term, one-off jobs, equipment leasing would be the far better choice whereas if your projects are long lasting and numerous, buying may be preferable considering that costs associated with heavy equipment leasing can quickly add up the longer a job lasts.

Why Do Companies Utilize Heavy Equipment Leasing?

As previously mentioned, buying heavy or large pieces of equipment is an incredibly expensive option. While this equipment may be essential, tying up large amounts of capital into one small section of your business can have ramifications that ripple throughout your entire company. This is where heavy equipment leasing becomes a much more attractive route to take.

Essentially, any piece of heavy equipment can be leased. Equipment leasing companies can now offer everything from forklifts and bulldozers to cranes and medical imaging equipment. Whatever your heavy equipment leasing needs are, there will be a company able to provide it.

As well as availability, the prospect of avoiding large down payments is one of the many desirable aspects of equipment leasing when compared to purchasing. Normally, acquiring the machinery occurs quickly, all maintenance and repair costs are usually covered by the equipment leasing company and there are many tax benefits available throughout the process. Even if you have the necessary capital to purchase, equipment leasing may still be the better choice to make based upon these reasons.

Final Thoughts

When it comes to deciding between heavy equipment leasing and purchasing, you first need to assess your company’s current situation, your growth plans, and evaluate the method which will benefit your business more. Leasing equipment for business purposes is starting to become the new normal as more and more companies are beginning to form partnerships with leasing companies dedicated to providing machinery in cost-effective and efficient ways.

While purchasing does still have some benefits, equipment leasing is a useful and effective method for businesses to take when looking to acquire heavy equipment while still preserving as much working capital as possible. This is why it pays to reach out to equipment leasing companies who specialize in the specific heavy equipment you need.

My role as the Vice President of Healthcare at Meridian Leasing is to partner with our top healthcare clients to build a medical equipment strategy to meet the organization financial needs.