Rent or Own? How to Determine What’s Best For Your Business
There are several ways to acquire heavy equipment like a forklift. The answer about how to acquire that equipment is not so cut and dry. How you acquire capital equipment should be determined by answering a few question, then having a discussion with your financial representative. The two of you together should be able to come to a conclusion about how to proceed. Questions we ask are:
What kind of equipment do you use?
Is your forklift equipment pretty standard, or do you have unique requirements that would render it pretty useless to anyone else?
How many hours will you use the equipment each day?
A forklift used three shifts, 7 days a week will depreciate much more quickly than a forklift operated only a few hours each day.
What is the operational climate for operation?
An outdoor application used at a fishery will effect resale and depreciation more than working indoors with canned goods.
Do your requirements change often?
If you have a pretty static operation, the likelihood of needing to alter your equipment needs is less than an operation that frequently changes based on the needs of its customers.
What is your cash flow situation?
Companies with a robust cash flow can better afford down payments or outright cash purchases than those that do not. Renting equipment, whether long or short-term relieves cash flow pressure.
Is your business cyclical?
Rentals can be turned in and re-rented based on the needs of your business while purchased equipment cannot.
What is the financial status of your company?
Purchasing a forklift or a fleet of forklifts will consume more of your available credit than renting. While renting forklifts requires a credit check, it generally does not affect your existing available credit.
What are your plans for the future?
Are you planning a plant expansion, new product lines or services that will require credit or cash? Using cash and credit now on forklifts can impede future plans.
Once you have answered these questions we would recommend you review the answers with your financial consultant before you proceed. Your consultant will likely have additional questions for you to consider before you proceed based upon his/her knowledge of your history and economic status.
Conger Toyota-Lift has the equipment you need and can provide you with a wide variety of equipment acquisition options. From short-term and long-term renting, leasing and financing, we will be able to provide you with the best combination of equipment and acquisition methods to suit your financial and operational requirements. Visit our rental page for more information!