Unprecedented, uncertain and unchartered territory. 2020 has been nothing short of unique, disrupting the way almost everything is done. A positive that can be taken, however, is that we can now learn how to adapt to unforeseen circumstances and make processes stronger. Of course, we’ve all dealt with volatile economic, social, and natural disasters before, but the COVID-19 pandemic has allowed us to think of new ways of doing business, including equipment rental.
Many businesses are faced with deciding whether to rent or buy equipment to keep operations running smoothly, while meeting their obligations. Making the right decision becomes even more crucial during crises, when in uncertain times, capital expenditure is put on hold and equipment rental is one way to keep your head above the water.
When cash flow becomes volatile, buying and maintaining equipment can be risky and expensive, so you may decide to rent equipment instead. Here, we take a look at the benefits of equipment rental in uncertain times and how this can help your business.
As mentioned previously, investing a lot of money into a long-term commitment, like buying new equipment, can be a risky decision. In times like we’ve seen this year, using a significant portion of capital to buy equipment puts you in a position you might not want to be in, with additional hidden costs for maintenance. Plus, if a project becomes halted due to a crisis, you’re stuck with machinery you bought that you don’t need to use. Renting equipment allows you to avoid making long-term commitments to machinery and spending significant amounts of money.
No maintenance costs
When buying equipment, it isn’t just the down payment and actual cost you have to think about. Consider how much it costs to maintain and cover any necessary repairs. These costs can range largely from routine inspections to major repairs, leaving you with even more uncertainty of what you’ll have to pay extra for.
One of the biggest advantages of renting equipment is that you don’t have to front maintenance costs. The company you rent the machinery from is liable for repair and maintenance, taking the costs away from you and your business’ pocket. When renting from trusted suppliers, contractors can be confident that their equipment is dependable and operates at peak performance, as all equipment is maintained in-house by expert technicians. You can remain on a tight budget and keep your workforce designated to what they’re supposed to be doing rather than distracting them with maintenance duties.
Although this can depend on each individual business’ tax return, in some cases rental expenses are viewed as project expenses and might come with a tax-deduction benefit. Meanwhile, purchased equipment is taxed at a depreciated rate. This makes renting much more financially flexible than an expensive purchase.
You can be flexible, too. Even with limited cash flow, you’ll still have obligations to meet and projects to complete. Renting can be a much more affordable decision that will keep you working when things get tough. No jobs are the same, with each having unique requirements. You can rent the equipment you need, on an as-needed basis for specific projects, and return them when you no longer need them.
If you’ve diversified your business and are offering new kinds of services or products, you’ll need new equipment that perhaps you don’t already own. Renting enables you to easily access new machinery for a certain period of time while working on a project. This is cost-effective and allows you to use specialised equipment for one project, and another for the next one.
Access the latest technology
As we said, with equipment rental you can use specialised equipment on an as-needed basis, which also gives you access to the latest technology. Having the newest tech in your machinery will help increase productivity safety and ease of use, allowing you to remain competitive in an ever-changing world of industry. The latest equipment has the most innovative features, for example, construction equipment technology has developed significantly over the last ten years, allowing contractors to work more efficiently and improve profitability.
Furthermore, if you’re stuck with outdated machinery that you bought, it will cost for storage space and even more to get inventory removed and replaced by buying the newer version.
No storage costs
When you purchase your equipment, it adds to your tooling and equipment inventory, causing stock piling to add up, increasing the need for more space. Storage costs can grow as you expand your assets and the need to protect, organise, and store them all, this will include expenses such as warehouse space, insurance, security, and monitoring. By renting, you’re keeping your overhead costs at a minimum as well as reducing the need for more valuable storage space. You’ll also remove the added nuisance of having to work out logistics and transporting equipment from site to site, since rental equipment can be delivered and picked up direct to site by the rental supplier. Now a days, many rental businesses even offer same-day delivery, so only pay for the equipment when you use it
In times of uncertainty, there isn’t any downside to renting equipment. You get the advantages mentioned, as well as minimising risk, costs, and owning outdated and malfunctioning equipment. Plus, by trying so many pieces of machinery, you can make an informed purchase decision if you decide to buy something that you need permanently when things are looking more positive.