FINANCING NEW AND USED CONSTRUCTION EQUIPMENT:
Does it make sense to rent or finance it? When should leasing a contract be considered?
The Construction Industry is one of the most rapidly growing industries in our Nation. The amount of government contracts, highway contracts, land development going etc… is why the construction industry is booming. In addition to that, there isn’t enough new blood in the industry. Meaning kids graduating high school aren’t getting into hard labor jobs anymore,,,this is creating a huge gap in the Industry not to mention a HUGE earning potential for anyone currently in construction or are considering going into construction.
Here are Tips to know when financing construction:
- Depending on the area of Construction you are in as well as where your business is located in the United States, lenders you can be considered for seasonal payments verses monthly payments.
- Lenders love construction equipment because the business is rapidly growing. This means someone with a mediocre credit score can get approved with good credit terms and a good financing contract.
- Should I choose an Equipment Finance Agreement or a Lease Agreement? If you are anticipating keeping the unit for a longer period than 5 years than an Equipment Financing Agreement (EFA) would make sense. If you are the type of person who likes the latest and greatest in machinery than a Purchase Option Lease Agreement might be a better fit for you.
- Different types of Construction Equipment can be quite costly to buy. So it’s important to know if renting makes more sense or if purchasing will make you more profit in the long run. Checking out rental rates is a good place to start if you aren’t sure.
- A great deal on used construction equipment can be found by looking at private sellers. Facebook and Craigslist are good market places to use.
Also, Auction Houses are another good source.