Need new lift equipment? Should you finance or lease?
When you need new lift equipment for your business there are options in how you acquire it. Two common options are purchasing and leasing, each with their own pros and cons. Purchasing means embracing the freedom of full ownership and shouldering the burden of maintaining and ultimately offloading outdated equipment that needs to be retired or replaced. Leasing offers many of the same benefits as purchasing, but with some key advantages. However, when considering leasing, operations must be vigilant, leasing terms can vary greatly across lenders. So, should you purchase or lease?
Here are three common methods for procuring lift trucks for both long- and short-term use.
- Leasing allows businesses to avoid the financial strain of an outright purchase, and instead pay for usage in low monthly payments. Lease replacement cycles keep fleets updated, avoiding high maintenance costs, concerns related to outdated equipment and an underperforming fleet.
- Purchasing gives businesses full ownership once fully paid off, with unlimited equipment usage, but the responsibility of maintenance and offloading aging units.
- Renting helps businesses that need a piece of equipment for a short period to support a variety of temporary situations like seasonal fluctuations in demand or one-off projects. This is not a recommended strategy for effective long-term fleet management.
Is Financing best for your business?
Financing your forklift or material handling equipment purchase does not need to be a difficult process. Gregory Poole’s financial programs are very competitive, and our finance team has the industry leading experience to identify the best course of action for your unique operation. Don’t forget to take advantage of the Section 179 Deduction which allows you to deduct the cost of qualifying equipment up to $1,160,000 in 2023, rather than depreciating the cost over a period of several years.
Pros of Financing
- Full ownership, no limits on equipment usage
- Tax depreciation benefits
Cons of Financing
- Hefty amount of cash to cover entire cost upfront
- Often results in using inefficient, aging equipment past its prime
- Responsible for equipment maintenance and selling old units
- No regular fleet rotation means limited access to newer technology, efficient power options
To apply for equipment financing fill out, sign, and date our credit application. Then mail or fax the form to: Gregory Poole Equipment Company Credit Department P. O. Box 469 Raleigh, NC 27602 or Fax 919.890.4661
Download Credit Application
Should you lease instead of purchase?
If your business prioritizes greater cash availability and newer equipment, leasing can make sense for several reasons. First, low upfront costs avoid the impact of a large down payment and smaller monthly payments preserve more cashflow. Lease terms lasting from 12-84 months are typically available from most lenders, enabling businesses to refresh their fleet with new equipment at regular intervals, offering the freedom to regularly re-evaluate fleet size and composition as business demands change. Frequently replacing outdated equipment with newer models is the best way to take advantage of advances in technology and ergonomics, supporting operators so they can better maintain lift truck operating best practices. If your business is looking for cost-effective, long-term fleet management with access to the latest technology and none of the headache of getting rid of old equipment, leasing could be the right option.
Pros of Leasing
- Passive fleet management
- Increased productivity with advanced technology
- Access to latest power options and emissions reduction technology
- Often most cost-effective method of procuring and using equipment
- Customize fleet and lease terms based on unique needs and changes in business requirements
- Can bundle maintenance into lease agreements
Cons of Leasing
- Better for longer-term (multi-year) engagements – not meant for short periods
- Need to pay close attention to all contractual costs – there could be hidden fees in addition to the advertised payment
In the end, it’s important to do your research and make an informed decision about what’s best for your business. When deciding between a lease or an outright purchase, you should consider several factors such as upfront costs, tax deductions and your budget.
Get more information to help you make the right decision for your business on your next lift equipment purchase from Gregory Poole here.