Many small businesses don’t have the capital available to buy new equipment, but they also might not know that they can rent most of what they need at a fraction of the cost.
For example, forklift rental at Modern Forklift can be a cost-effective way to expand your business without tying up a lot of money in a depreciating asset such as a new forklift. In addition to being more cost-effective, here are the other benefits of renting a forklift instead of buying one.
Maximize Your Available Credit
When you buy a forklift on a finance plan, you lower your ability to take out other loans if and when you need them. This could be a major issue if you find yourself in a financial situation that requires a loan to increase cash flow or to make another large purchase that your business can’t operate without.
Remember that loan officers take into account your debt-to-income ratio when deciding whether or not to extend you a loan. If you have some of the money tied up in a new forklift, you may not be able to borrow money you need later. Renting a forklift doesn’t require credit and doesn’t impact your ability to borrow money for other needs.
Pay Only For the Actual Time You Need the Forklift
The amount you pay for a rented forklift is equal to the amount of time you use it. If you buy a new forklift, you’re paying for the entire piece of equipment no matter how often you actually use it. You might have to own your forklift for several years before it pays for itself.
Of course, this depends on how much you actually use the new forklift, but if you don’t plan to use it all day, every day, a rental might make more sense.
Generate Cash By Selling Assets
If your small business is struggling with cash flow and you have assets that you don’t use frequently, like a forklift, you can actually improve your financial situation by selling off those assets and renting instead.
For example, if you own a forklift, but only use it once or twice a month when you get supplies that need to be stored on high shelves, selling that forklift and renting one for those couple days each month can give you much-needed cash while still having access to the equipment you need, when you need it.
Owning your own forklift might seem worth the convenience of always having one on hand when you need it most. But, most forklift rental companies have plenty of stock available so that you can rent one on short notice.
Even if you have a sudden need for a forklift and you no longer have yours, it’s still worth the savings to arrange a rental instead of keeping a seldom-used piece of equipment around when you could be putting that cash tied up in that piece of equipment to better use.
Conclusion
Before you lay out a lot of cash or credit to purchase a forklift, consider renting one instead. You might discover that renting this type of equipment is a better business practice for your company than the overall expense of owning.