Increasing your forklift fleet can be an expensive task. Rather than buying, many companies, both large and small, use long-term renting to increase their fleet size, and for good reason! Long-term renting can improve your cash flow and your bottom line but that’s not all. Here are eight major benefits you could see by increasing your fleet through long-term rentals.
1. CASH CONSERVATION
There is no cash outlay to obtain equipment under a long-term rental agreement. Save your cash for alternatives that produce profits.
2. PAY FOR WHAT YOU USE
Long-term rental agreements are based on your expected hours and operating conditions. Unlike purchasing equipment where you’d end up paying for 100 percent of the asset, you pay based upon the expected usage rate of the equipment.
3. RENTAL PAYMENTS ARE 100 PERCENT TAX DEDUCTIBLE
Rental payments are an operating expense and are 100 percent deductible as a business expense. Get away from the hassle of depreciation schedules and damaging tax ramifications*.
4. FIXED PAYMENTS, NO MAINTENANCE SURPRISES
Long-term rental agreements typically include normal maintenance. Your dealer owns the equipment, so maintaining it is their responsibility. You’ll be able to keep your material handling costs consistent and predictable.
Long-term agreements can provide for upgrades should your business needs change. Instead of getting stuck with equipment you no longer use, your local dealer will simply replace your unused equipment with more suitable models.
6. KEEP YOUR CREDIT LINE CLEAR
Unlike financing equipment, long-term rentals have little impact on your ability to borrow money.
7. PREFERRED RATES ON SUPPLEMENTAL EQUIPMENT
If you’re already a long-term rental customer, you can often get preferred rates to fill your seasonal demands.
8. ELIMINATE STAND-BY EQUIPMENT
Instead of purchasing more equipment than you need to allow for break-downs and cyclical needs, using a rental fleet at the appropriate intervals can reduce your costs and eliminate the headache of owning mostly unused equipment.
Still not sure if renting is the right choice for your business? Explore the benefits and drawbacks of renting, leasing and buying as well as which financial situations and production workflows are best suited to each. Read: Which is Best: Renting, Leasing, or Owning Your Forklifts
*Consult your tax advisor on the specifics of rental payments for your company