Starting or expanding your recycling business can be a profitable and eco-friendly venture, and it’s no secret that the recycling industry is rapidly expanding. The public’s increasing awareness of the environmental impact of glass, plastic and metal waste and the drive towards sustainability has led to a growing demand for recycled products. This has created opportunities for entrepreneurs to start recycling companies and for existing recyclers to expand their operations.
Why Recycling is an Expanding Industry
Recycling is a rapidly growing industry because of the numerous benefits it offers. For starters, it helps to conserve natural resources, as recycled products use less energy to produce compared to the production of new products. Additionally, recycling plastics helps to reduce greenhouse gas emissions, as it reduces the amount of waste that ends up in landfills, where it releases methane, a potent greenhouse gas.
Like most businesses, recyclers create jobs and help stimulate the economy. As the demand for recycled plastic products grows, the need for plastic recycling businesses increases, creating jobs in the collection, sorting, processing and manufacturing of these products.
According to a recent EPA report, on a national average, there are 1.17 jobs, $65,230 wages and $9,420 tax revenues attributable, for every 1,000 (US) tons of recyclables collected and recycled.
Last, but not least, recycling helps to reduce the environmental impact of waste, especially plastic. Plastic is a material that takes hundreds of years to decompose, and the increasing amount of plastic waste in our oceans and landfills is a growing concern. By recycling plastic, we can reduce the amount of plastic waste that ends up in our environment, helping to preserve our planet for future generations. The public, especially Millennials, seek to support companies that have sustainability goals.
Yet, one of the biggest challenges faced by business owners is the cost of recycling equipment, which can run hundreds of thousands of dollars. This is why financing is such a critical component of a recycling business.
Global Financial & Leasing Services (GFLS) provides equipment financing to a wide range of credit tiers. We can finance essential recycling business equipment, such as:
- Grapples (for loading materials)
- Loaders (for moving materials)
- Processors (grinders, melters, etc.)
Traditional Loans for Recycling Business Equipment
Traditional loans from banks and other financial institutions are one of the most common sources of financing for recycling businesses. You can secure a loan by putting up collateral such as property, equipment or inventory. The amount of the loan, the repayment terms and the interest rate will depend on factors such as your credit score, financial history and the size of your business.
Traditional loans are popular because they provide a fixed amount of capital, which makes it easier to budget and plan for the future. Additionally, interest rates are typically lower than other forms of financing, making this option a cost-effective way to finance your business. However, the application process can be lengthy, and the requirements can be strict, which may make it difficult for some businesses to secure a traditional loan.
Leasing Equipment for a Recycling Company
Leasing is another popular financing option for recycling businesses. You can obtain equipment without having to pay the full cost upfront. Instead, you pay a monthly or quarterly fee to the leasing company. At the end of the lease term, you can either buy the equipment for a reduced price, return it, or renew the lease.
Leasing is a good option for businesses that need to upgrade or replace equipment frequently, as it provides more flexibility and avoids the need to tie up capital in equipment that may become obsolete quickly. Additionally, it is typically easier to obtain a lease than a loan, and there is less risk involved, since you are not responsible for the equipment’s depreciation.
LEARN MORE: Loans vs. Leases: Choosing the Right Option for Equipment Financing
Grants for Recycling Initiatives
Grants are a type of financing that is given to businesses and organizations with a specific purpose, such as environmental protection or economic development. There are government and private organizations that provide grants to plastic recycling businesses, which can be used to purchase equipment, research and development or expand operations.
Grants are a great option for businesses that want to start or expand a plastic recycling operation, as they do not need to be repaid. Additionally, grants can help businesses to overcome the financial hurdles associated with starting a new business. However, the application process for grants can be competitive and time-consuming, and there is no guarantee that you will receive the funding you need. Many of them are earmarked for nonprofits or those working directly with local, state or federal government agencies.
GFLS Can Help Your Recycling Company Get the Equipment It Needs
Starting or growing your recycling business can be a rewarding (and profitable) goal, but it requires careful planning and financing. By considering the options of traditional loans, leasing and grants, you can find the right solution for your business and secure the funding you need to purchase the equipment you need. Contact GFLS to explore your financing options and move even closer to contributing to a more sustainable future.