Tag Archives: leasing
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.
To Buy or To Rent Sydney Office Space? Five considerations to help you decide
Despite the economic downturn, the Sydney commercial property sector is still looking healthy. As Australia looks poised to come out of the financial slump strong, businesses are taking advantage of current depressed property and rental prices and looking towards the future.
The option of buying or leasing commercial property is certainly something that many small businesses will consider. The decision is something that will come to greatly affect the business in the long run and there are many questions to ask. The individual needs of your business will ultimately determine the best option for you, but here are a number of things that every small business should think about:
Upfront Costs: For some businesses, the most limiting factor to buying office space is the large upfront costs. Down payment on typical Sydney real estate is usually about 25%-30% of the total cost, in addition to fees, inspections and other expenditure. However, if you’re in a position where you can afford to, purchasing a commercial property can pay off in the long run and greatly reduce your future overheads.
Variability: Obviously, one of the most attractive incentives for buying is knowing more accurately the costs you will incur for a certain amount of time. Leasing leaves many businesses vulnerable to the whims of the property sector with some leases pegging rental prices to the Consumer Price Index. However, many areas, such as Grade A office spaces in Sydney CBD, experience much less market fluctuation. Consider the variability of the area and grade of the property you’re looking at.
Appreciation: If you decide to purchase commercial space, you’re adding a valuable asset to your business with the potential for appreciation. Of course, this means you’ll need to do some heavy research to find a property that has good potential and will suit your business’s needs.
Depreciation: With appreciation, comes depreciation and tax considerations. Costs incurred from repairs and renovations to tenanted property are handled differently than private property. Lease holders can claim improvements immediately while owners may be required to depreciate their expenses over time.
Potential Growth: Finding a space that suits your business is very exciting, but what about the future? For many newer businesses, leasing could be the preferred option as it allows them to expand their more readily and with fewer limitations. Keep in mind that if you do outgrow your space, you can always lease the premises to help with the cashflow. Or you can consider initially purchasing a larger space and leasing part of the premises to another business to help cover some of the overheads.
These are just some of the many considerations that will help you decide if buying or renting is right for your business. An attorney or financial consultant will also be able to provide more information that is more specific to your business needs.