Lease your Hydraulic Tools
More and more, our clients are choosing to lease equipment and Accudraulics is here for them. With a lower cost of ownership and flexible payment options, leasing construction or demolition equipment offers a number of distinct advantages over buying equipment. A good rule of thumb is to buy appreciable assets and lease depreciating ones for the biggest tax and income earning benefits.
Frequently Asked Questions
What is equipment leasing?
Leasing is an alternative to purchasing or traditional lending. The leasing company purchases the equipment you need from Accudraulics and then lends it to you in exchange for payments determined between you and the leasing company. We partner with several leasing companies who are familiar with heavy-duty equipment leasing.
How will my payments work?
Before the lease, you and the Accudraulics will structure payments to match your needs. Payments are flexible and can be scheduled in monthly, semi-annual or annual instalments.
Do I need to make a down payment?
Generally, no down payment is required, but making one will lower the cost of your payments and may be necessary depending on your credit rating. This will be determined by the leasing company.
What are the tax benefits of leasing hydraulic equipment?
You can potentially claim your lease payments as a tax-deductible expense; however, always consult your accountant to see what’s possible and what works best for your company.
What happens at the end of my lease?
You can choose from a number of end of lease options. You’ll determine your end of lease option at the beginning of your lease before you get your equipment.
What are some advantages of leasing over traditional financing or buying?
Ask yourself how sensitive is your cash flow or line of credit for equipment purchases? Does your desired equipment have a high rate of obsolescence? Do you want to possibly claim your tax benefit in the short term through leasing or long-term through depreciation?
If you prefer to keep your cash for other business expenses and potentially claim your tax benefits in the short term, leasing may be more optimal for your business. Your best bet is to speak with your accountant and explore your options.
So how do I decide to lease or buy?
That question is almost as important to a company as the selection of the equipment itself. Not only is the performance and maximizing billable hours of the equipment important, how you pay for that equipment can severely impact a business’s ability to operate.
And there’s no easy right or wrong answer. Most tax professionals will analyze the options of both for a specific company before making a recommendation to their clients. In the end, it is YOUR corporate strategy, that will determine the best way to finance construction equipment.
With that in mind, you should consider these big benefits that leasing offers to determine if it is the right fit for your company and fits your budget strategy:
1. Expense or Depreciate. Leasing provides you with the ability to expense lease payments rather than depreciating the capital cost of equipment. Obviously, our tax strategy will help you determine which choice is best for you so make sure to ask your tax advisor the impact this would have on tax implications for you.
2. Frees up Operating Capital: If you only have limited budgets and need your capital for other expenses, leasing would be a good route. Having lower ongoing payments allows your existing cash to work for you in other ways. Essentially it gives you more breathing room with your capital and lowers the risk of a possible cash crunch.
3. Upgrading: Many lease agreements allow you to upgrade the equipment for additional charges. If you purchased your equipment you would have to sell it and then re-buy if newer models have the features you want.
4. Flexibility: Leasing agreements have flexibility in terms. You are usually able to negotiate favourable repayment plans that suit your budget and needs. For example, you could have lower payments and longer terms than a loan may offer. Also, leases usually don’t usually require down payments, whereas loans frequently do.
Accudraulics can recommend several leasing companies and contacts familiar with leasing hydraulic tools and equipment. Contact us today.