Rental Equipment That Will Give You the Best Bang for Your Buck
When Renting Equipment Makes Sense
If you want to maximize your company’s capital and give yourself some financial wiggle room, there may be times when it makes more sense to rent equipment instead of buying equipment. Renting is a popular choice among many contractors, with nearly 40 percent of companies choosing to rent. Here are some reasons to rent equipment when it is time to tackle an important job.
Shorter Job Duration
If you are not working on a job for the long term, it might be wise to rent the equipment you need to finish on time. If you do not plan on using the equipment for more than 40 percent of the time it takes to complete the job, you might find that new equipment sitting around collecting dust once you are done.
You also need to figure out your equipment utilization. When you reach 100 percent of your equipment utilization, it means you will have used it for 176 hours or more per month. If you plan to use the equipment up to 60 percent of the time, your decision to rent or buy should come down to your company size. If you are a small business owner, it still might make more sense to rent your equipment.
No company, whether it is in construction or production/manufacturing, likes the idea of losing money to downtime. It is especially harder for companies who own their equipment and have to pay for repairs. When you rent, you are not responsible for repair costs (unless the breakdown was egregious).
Most rental companies will take care of any needed repairs and maintenance on the equipment. Additionally, rental companies usually have a fleet of machinery ready to rent. So, if a front-end loader breaks down and cannot be fixed right away, the company will probably have another one ready to go.
Cannot Afford New Equipment
One of the biggest problems in the construction industry is most companies cannot afford to buy new equipment. Many construction businesses do not have the money to buy used equipment. If you want to finance new or used equipment, that is not easy either. In most cases, you will need a significant down payment, a strong business credit score and proof you will profit from using the equipment.
When you rent, you never have to worry about a down payment, interest rates, credit scores or whether or not you can actually qualify for financing. You will most likely pay to rent the needed equipment upfront. If you cannot make a significant upfront payment, chances are good the rental company will have a payment plan in place. If you make your payments, you can keep using the equipment for as long as it is needed.