The trend in the construction industry is quite obvious – more and more construction and building companies are opting to hire the equipment they need for a project rather than buy it, and for good reason. Hiring construction equipment can save you time and effort, and, more importantly, expense. By hiring construction equipment, you can also be assured that you are getting the most updated equipment out there, and you no longer need to worry about maintenance or repair costs, as these are usually shouldered by the construction equipment rental company. But if you are still unsure about whether you should buy equipment or not, here are some top financial factors you should think about before you purchase your own construction equipment.
- Maintenance and storage expenses
When you purchase your equipment, you need to think not only of the actual purchase price of the equipment – you also have to consider maintenance and storage expenses. The maintenance of the equipment falls on your hands, and any repair or replacement of parts is your responsibility as well. This is important for keeping you and your employees safe in daily life at work. Storage expenses can also set you back financially since you can’t simply store equipment in the outdoors the whole time unless you want it to suffer from early wear and tear. Finding the right storage facility entails additional expense, and this also includes transport expenses to the facility itself.
- More money for new opportunities
Spending all your financial resources for new equipment may be an investment that you think will pay off in the end but think about this as well: if your capital is limited because you bought equipment, you could well miss out on other opportunities for growth and expansion. Being able to invest your capital in new and interesting projects with a lot of potential is better than spending your limited resources on new equipment.
- Tax considerations
When you rent or hire equipment, this can be written off as an expense for your business rather than a capital gain, as confirmed by equipment hire companies like www.aphcranes.co.uk. When you buy equipment, this is a capital gain. At the end of the tax year, you can save on your taxes when you hire equipment rather than buy it outright.
- A better balance sheet
Any financial expert will tell you that it is better to have an asset rather than a liability on your balance sheet – which rental costs are. Rental costs can result in a better balance sheet for your company, and one main advantage of this is the fact that you have better leeway when it is necessary for you to borrow money or get a loan in the future.