Three Reasons New Firms Should Rent Their Construction Equipment

Posted on: 26 September 2016


The effort to start a small construction business is often nothing shy of overwhelming. This isn't just true when it comes to the physical labor that goes into the process, but more importantly, when it comes to the financial strain. You can help lessen this load by opting to rely on rental services for some of your equipment needs, rather than outright purchasing the equipment. Here are just some of the benefits of doing so.

Eliminate Failed Or Small Returns

When you purchase construction equipment, this is an investment you expect to earn a return on. Each time you complete a project and are paid, you earn back some of the money you spent purchasing the equipment. Unfortunately, the scope of all projects aren't the same.

You might have a piece of specialized equipment you seldom use. With such limited use, your ability to earn a return on the investment is reduced, if not halted. When you rent this equipment, you don't have this concern, which keeps more money in your company's operating budget.

Avoid Costly Maintenance Expenses

The real cost of ownership is much more than the purchase price of the equipment. When you own this equipment, you also have to factor in any expenses that relate to maintaining it. Not only will you be required to pay for preventive maintenance, but you will also be required to cover the cost for any malfunctions. For a new business, these costs can be a significant undertaking.

When you rent your equipment, these are expenses you simply don't have to worry about incurring, as these are all covered by the rental company.

Keep Your Business Stronger On Paper

When biding on some projects, some agencies will review your company's financial record as part of the review process. If your company has a high-debt ratio, they may consider the idea of entering into a contract with you to be too risky.

Unless you have the capital to outright purchase all your equipment, it's likely that you will need to have it financed. Having multiple high-dollar loans can make your organization's financial situation seem somewhat unstable. When you rent equipment there are no loans and no increased risk, making you more appealing during contract negotiations.

If you are a small business, don't automatically assume you have to purchase all your equipment right away. Make sure you aren't overlooking the benefits equipment rental services, such as A-1 Rental, can offer.