Financing a large truck or industrial machine is a standard practice that many companies in need of this equipment manage by borrowing money from a bank lender so they can purchases it, or using a company that loans it out. There are many different types of companies that specialize in industrial equipment or truck financing. It is important to know the details of how these companies operate, so you can find the best possible deal for your needs.
- As with any type of loan, a bank or financing company will lend you the money to purchase large pieces of equipment or large trucks at a particular interest rate, depending on the institution you are borrowing from or the quality of your credit. If you believe or know you will have steady business once you have your equipment or truck, and therefore will be receiving regular payment for your services, taking out a loan to purchase these items is an excellent idea, because you will be able to pay back the capital group or bank on time and the interest can simply be factored into the fee for each job your company performs. If business is not guaranteed to be steady during the loan period, this option becomes more and more risky.
- Leasing a large piece of equipment or a truck is a better idea if your company is trying to retain capital and spend money in other places. The cost of leasing a truck is much less than buying it and making monthly payments. However, the mileage of the truck comes into play, as does the wear and tear on both the truck and the equipment. It's also considered throwing money down the drain in a way, because at the end of the lease, your company will not own the truck or equipment; it was merely rented for the term of the contract. However, leasing can be ideal if the truck or equipment is only going to be used sparingly for certain jobs each year, in which case it isn't worth buying it.
- Buying a truck or equipment is a good idea, even though it may be more difficult to finance. This is because you will retain a portion of your investment in the equipment or truck itself when you buy and pay it off over time. This way, though, you can rent the truck out to other companies or people for a fee when you don't need it, earning money that can help you with your payments. However, maintenance and upkeep come into play here, as they become your responsibility. Be sure to get a manufacturer's warranty for at least a few years from whomever sells you the truck or equipment; and make sure whomever you rent the truck or equipment to provides proof of insurance.
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