Reasons Why Renting Equipment Is Advantageous Than Owning It
The decision to rent or purchase equipment is critical for project profitability. The article explains the top benefits you can get by renting the equipment.
Businesses and companies are always striving to gain some competitive advantage. This can be in the form of skilled labor, bright minds, better technology, research, and development, or the best in the form of reduced costs. Finance teams browse their balance sheets over and over again to find areas of improvement and increase their book value.
One aspect of the asset side of the balance sheet can make a big difference in the overall financial position and profitability of the company, which is the equipment account. Carefully comparing and analyzing the impact of renting and buying the equipment can help decision-makers make the best decisions.
Almost all businesses use lifters, excavators, generators, loaders, and other essential equipment that need to be streamlined and readily available to achieve maximum efficiency. Cost-benefit analysis can help you determine whether to rent or buy the equipment.
Renting equipment allows large companies to augment their fleet whenever required. On the other hand, rentals provide bidding freedom to small businesses on projects that involve the use of specific equipment.
The article below provides some benefits you can gain by renting equipment. This decision can impact many business areas positively.
Benefits In Project Control
Reduced After Job Disposal
If you buy equipment specific to a project, what will you do with it after project completion? You will either sell it or keep it for any future similar project. What will happen if it breaks and needs repairs. The equipment will only become an additional expense. If you decide to keep it will increase your maintenance and storage costs. So, rented equipment will take the post job disposal off your shoulder. All you need to do is to return it to the best rental service provider company.
No Obsolete Equipment
When buying equipment, you are binding yourself in a long-term commitment to providing safety, maintenance, and repair to your equipment. While when you rent, you get to deal with equipment for just as long as you need them.
Accurate Predicted Budget
Renting equipment enables you to make accurate cost estimates resulting in easy determination of the expected project budget.
Productivity On The Job
Right Tool For The Job
By going for the renting option, you can rent the exact tool and quantity needed for the job anytime.
Well-maintained And Ready To Use
Commercial or industrial equipment operating conditions are generally tough and hard. Equipment must be strong enough to withstand these challenging conditions and perform well. Renting equipment from reputable outlets will get your hands on well-maintained, certified, updated, safe, durable, and ready-to-use equipment.
No Breakdown Problems
When you rent the equipment, they come serviced, maintained, and in a ready-to-use condition. Therefore, this eradicates the chances of machine breakdowns that can cause project delays. These delays can translate to increased labor costs and lost goodwill for your company. So, simply rent the new equipment and save both money and time.
Minimal Equipment Requirement
Renting enables you to get the exact equipment required for the job. Eliminating the chances of any problem or increased expenses that can come with dealing and managing inventory.
No Storage Cost
Storage cost is another account head that every business wants to get rid of or make minimum in size—renting equipment eliminates the equipment storage cost for your business. Rented equipment is delivered when and where you need it and retrieved immediately after use. This means you are not carrying any associated costs with the completed project.
Reduce Maintenance Expense
When you buy equipment, you own its benefits and losses all in all. All the maintenance, repairs, and functional costs are on you. While when you rent, you don’t have to worry about any associated costs because the rental company has taken care of all for you.
Reduced Property Tax
Corporations and businesses always try to find ways to reduce their tax payments while staying within legal limits. Do you know by renting equipment, you can lower your taxes? Well, the technical aspect behind this is that rented equipment appears under the expenses while owned equipment makes its way to the asset side of your balance sheet. Hence, increasing the payable tax amount. So, it is better to rent your next set of required equipment rather than buying them.
Increased Borrowing Capacity
The process of renting equipment is quite convenient, less complicated, and straightforward both on the ground and in your accounting books as compared to purchasing them.
Conservation Of Capital
Renting equipment helps you save on initial capital by avoiding the expenditure on buying equipment that may not be used again. When renting you get good quality equipment for use by paying only a portion of the actual equipment cost.
Completing a profitable project involves some critical decisions to cut the cost effectively without compromising quality. Renting equipment is the best and most effective way to decrease your project cost without experiencing any fluctuations in quality and completion time.