Your construction company needs heavy equipment. Maybe you’re expanding, want the opportunity to bid a certain project, or intend to competitively position your company for earning government contracts associated with the Infrastructure Investment and Jobs Act (IIJA).
Your first, and maybe most important, decision is how to pay for the construction equipment. As you well know, heavy construction equipment is a significant investment, which comes with a hefty sales price. Should you finance or purchase it outright?
Even if you have the cash on hand to outright purchase heavy construction equipment, there are a few reasons not to make that large of a capital outlay. Many economists predict the U.S. will experience a recession. Jim Jenks, Global Leasing & Financial Services founder and CEO says, “In this economy, conserving your cash is critical. Over the next two years business owners will want to stretch their cash flow rather than sink it into hard assets, which diminishes the cash you might need down the road.”
Buying your heavy construction equipment may very well put your business in a precarious position when/if our economy goes into a recession. However, there are other reasons that make financing a heavy equipment purchase a smart decision, including:
- Monthly payments are easier to budget for and manage. Financing your heavy construction equipment means you make set monthly payments for a set period of time. This allows you to budget for the long-term, as well as bid projects in a way that covers your equipment payments. Financing lets you extend paying for a major purchase over the course of years, and hopefully fund the payments with project revenues.
- Expand your heavy construction equipment fleet faster. Yes, cash is king. It’s also a limited resource. Purchasing equipment outright depletes your cash, limiting your ability to grow your fleet as quickly as you might like. For most construction business owners, it is far more realistic to finance multiple pieces of heavy equipment at a time than pay cash for each of them. Carefully review your finances to ensure that you can manage multiple monthly payments.
- Maintain your company’s financial flexibility. Financing allows you to reserve cash on hand to ride out a slow month or quarter, hire additional staff to take on new projects, or purchase additional materials or assets needed to successfully bid on a potentially lucrative project.
- The outcome is the same whether you purchase outright or finance your heavy construction equipment. Financing heavy equipment can result in the same outcome an outright purchase does. Meaning, you can still own the equipment at the end of your financing agreement. Or, you can start the financing process all over again with a new or upgraded piece of equipment.
Explore Your Heavy Construction Equipment Financing Options
Every construction company is unique and must match its financing solutions to its operations and growth plans. Beware of lenders who offer limited or one-size-fits-all financing options. Instead find a partner, like Global Financial & Leasing Services (GFLS) who looks at your business holistically and on its own merit to customize your financing.
GFLS is a trusted source for construction equipment financing, helping companies secure the financing they need to obtain reliable new or used equipment. As a direct lender, we use in-house funds for financing equipment, as well as our relationships with banks and other institutions, so we can create the perfect financing plan for you.
The process is simple. After you submit your financing application, we will quickly review it and give you a decision. More often than not, we approve businesses regardless of their credit. If you have tried other lenders who rejected your request, consider working with us.
With GFLS, you can:
- Get competitive rates, as well as 100% financing
- Benefit from tax deductions on essential-use equipment
- Avoid down payments; we ask for your first payment in advance, and then you can pay once you receive money
- Save your cash
- Maintain or establish your credit through leasing
- Obtain equipment while it is current without making big purchases that will soon become obsolete
- Purchase the heavy equipment after the financing agreement ends
Work with a company you can trust for all of your construction equipment financing needs—GFLS. Contact us today for more information regarding our construction equipment financing.