If you require a dump truck, you will need to figure out how to pay for it. That is a major consideration to make, because these machines aren’t cheap. Thankfully, dump truck equipment financing options exist, so long as you know what to look for and where to look.
There are three key options available:
- Pay for the dump truck outright.
- Get a bank loan to pay for the loan.
Comparing Dump Truck Equipment Financing Options
Generally speaking, purchasing is not an option, as few people or businesses have in excess of $50,000 lying around spare. And if they do, they probably need that capital for other things. A bank loan could be considered, but many businesses already have a lot of lines of credit out there, which means they won’t be accepted. The third, leasing, is therefore often the better solution. It is quick to obtain and easy to get approved for as well.
Leasing is very similar to buying, with the different being that it is longer term and that you have a buyout option at the end of it. While you lease, you don’t own the equipment, but you can use it as per your agreement. The equipment is the collateral for the lease. When the lease ends, you can take advantage of the buyout clause, such as paying a 10% of the fair market value, at which point you will own the equipment.
Benefits of Leasing over Loans
There are a number of benefits of leasing over loans, including:
- It is easier to qualify for a lease. Banks will require around three years’ solid financial history, meaning startup companies cannot access loans.
- Cash flow is improved. Startups in particular need to have control of where their cash goes. With leasing, a down payment is usually not required, bar perhaps one monthly payment. Loans, by contrast, often need at least 25% of the purchase price as a down payment.
- Leasing offers tax advantages. Often, they are 100% deductible. With loans, it is usually only the interest that is deductible. This means a lease is a much better option.
- Greater value for money. You get high quality equipment for a very low cash outlay.
Other advantages may exist depending on your particular situation.
Where to Find a Lease
There are lots of companies that you can go to for leases. They often have different specializations, such as working with startups, businesses with no credit, or specialized equipment. It is important to do your research, so that you find the most competitive option out there. Remember that they are supposed to be of greater benefit to you than what a bank could be, so do make sure you know the cost of a bank loan, even if it is an approximation rather than a definite figure. Speak to others in the industry who are likely to be able to give you some fantastic advice on which companies to work with and which ones to avoid.