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When and How to Get Construction Equipment Leasing
Construction Equipment Leasing is a type of leasing arrangement where a small business owner (like you) would like to get Construction Equipment but at a lower cost than when you buy the Construction Equipment yourself. It falls under the broader category of Equipment Leasing which means that the equipment you want to lease is probably very expensive (and Construction Equipment are extremely expensive) but you cannot rationalize buying the equipment because you might need the equipment only for the short-term or you lack the capital for outright purchases.
The usual lease period for Construction Equipment Leasing starts at the 24-month term and could last as long as a 48-month term. Usually, Construction Equipment Leasing will not require you to make a hefty down payment though you may be required to give a security deposit of some amount. This allows you to use more of your cash flow for your business needs and to save up. However, for long-term purposes, it is not advisable to use the Construction Equipment Leasing option rather, a cheaper option for the long-term loan option is bank financing itself. Construction Equipment Leasing is ideal for short-term needs only.
Construction Equipment Leasing may fall into three main categories namely the capital lease, the operating lease, or the skip lease. The capital lease (also called a finance lease) acts like a regular loan and will last about as long as the actual lifespan of the Construction Equipment. If the Construction Equipment is in good working condition at the end of this lease term, the capital lease allows you to take advantage of the stipulation to buy the same Construction Equipment you have been using for your company. The operating lease (also called a true lease) lasts shorter than the life span of the Construction Equipment and will usually use up less of your business cash flow. You may find payments for the operating lease to be tax deductible (but youll have to check the agreement you are entering if this applies to you.) A skip lease is ideal for any seasonal business where income usually flows in only during specific months in the year (rather than year-round like other businesses.)
When it comes to Construction Equipment Leasing, you may get yourself a better deal if you go straight to the Construction Equipment manufacturers. The larger business finance institutions are also known to do this more commonly than the smaller ones. The best way to find this option is to go online and look for any links to “leasing options.” As with any financial transaction, do not snatch up the first offer you get. Rather, try to look around the market and see if there are any Construction Equipment Leasing companies that can give you a better deal under the same leasing terms. It is equally important to find out if you are in for any tax breaks if you pursue Construction Equipment Leasing for your company. This can be confirmed by your company accountant.
How car leasing works
Car leasing is a popular alternative to borrowing to purchase a business car, but car leasing can be a great alternative for individuals too. Whether you want to purchase a car or just rent one for a while, car leasing could be the answer. Car leasing is basically renting a car, similar to leasing an office or house. When leasing a car, the finance company purchases the car of your choice. They then allow you to use the car for the term of the lease in return for a monthly payment.
If the vehicle is used solely for business purposes, the repayments made are completely tax deductible when car leasing. Car leasing involves paying the depreciation which becomes your tax deduction. The residual value is the depreciated asset price at the end of the term.
Benefits of car leasing
Some of the benefits of car leasing are:
Car leasing payments can be a tax deduction for business vehicles Car leasing enables you to change your car every few years Interest and monthly payments are fixed, so costs are known in advance Car leasing payments are often lower than a car loan The car is used as security against the lease, so interest rates are often lower than car loans Car leasing offers flexible terms from 2 5 years Car leasing can be used for either new or used vehicles.
Types of car leasing
There are three main types of car leasing
operating leases, finance leases and novated leases.
The main difference between operating and finance leases is at the end of the car leasing term. With an operating lease, the lender retains ownership of the car, whereas with finance leasing, you are responsible for the residual or balloon payment and you assume ownership. Options at the end of a finance lease are; pay out the balloon payment and keep the car, trade in the vehicle, or refinance the balloon payment with another lease or loan.
A fully maintained car lease is a finance lease that includes running costs of the car such as services, fuel, tyres etc. This type of car leasing is perfect if you need to have fixed costs each month.
Novated leasing works quite differently to operating and finance leasing. If you are an employee interested in leasing a car, you should consider novated leasing if you wish to salary package a car.
Who does car leasing suit?
Car leasing suits anyone who wants the latest car or whose business requires a car that is always new. Car leasing is possible for personal, business or mixed use cars, but car leasing is particularly useful for financing cars used solely for business purposes. Because car leasing payments are often lower than car loan repayments, car leasing is an attractive to anyone struggling to afford a car loan.
Applying for a car lease
360 Financial Services can help you choose the right car leasing option for you. For more information on car leasing, please contact 360 Financial Services or apply for a car lease online.