3D Printer Financing
3D printing is a big industry. The market for 3D printing worldwide was $13.84 billion in 2021 and is expected to grow at 20% annually through 2030. ...
A decent used skid steer will cost you anywhere from $10,000 to $40,000.
In the $15,000 range you're usually looking at a model that's ten or so years old, while at the top of the range, you're usually looking at some equipment that's newer.
When people ask about leasing construction equipment, often they mean "rent" construction equipment.
The distinction between renting and leasing in equipment is pretty much the same as for a car.
Important: If you don't want to read though a whole bunch of stuff, and just want to get real advice from a real person, click here to get a quote
It depends. If you really only need the equipment for short term, and not very often, renting is probably smart.
It's only smart, however, if you need the equipment almost never.
This is because, just like renting a car, the rental rates can be exorbitant. For example, a used skid steer that you could buy for about $25,0000 might rent for $2,700 a month, or $1,000 a week.
It doesn't take very many monthly rentals before you would have bought yourself a skid-steer.
If you plan to use the skid steer regularly, you've got four options which are better than renting:
Let's talk about these four options -
Ok, this isn't an option for many, because most don't have the cash laying around, and if they did would probably not want to take it out of working capital. But if you do have the cash just sitting there you can do it.
Benefits of Paying Cash:
Drawbacks of Paying Cash
If you don't have the cash, this is definitely your cheapest option. The problem, of course, is that the only way to borrow money from a bank is to prove you don't actually need any money.
With that being said, if you've got time in business, awesome credit, and you don't need your equipment immediately, you will save a little bit by just going to your bank and asking for the money.
Pros of Bank Lending
Drawbacks of Bank Lending
Until a few years ago, most companies leased their equipment.
Then a tax law called section 179 came and said that you could write off an entire equipment purchase immediately, up to $500,000 for the year, and it made more sense to do an equipment loan.
Click here to get a quote to lease or finance a skid steer
With a lease, you make payments for a set period of time, typically 2 to 5 years, and at the end you can own the equipment for 10% of the original purchase price or you can walk away.
For example, if you're planning on leasing a $25,000 skid steer for 5 years, here are some different monthly payments you might expect based on different credit profiles:
Our customers are often amazed at the huge swings between the payments of someone with great credit and someone with poorer credit, but from a lenders' perspective, there's enormous risk in lending money for used equipment to small businesses.
(Even when financing heavier equipment like a skid steer)
The top two things that make a difference are having been in business for a while (2 years or more) and your personal credit.
Pros Of Leasing Equipment
Drawbacks of Leasing Equipment
By loan, we really mean an "Equipment Finance Agreement." That's kind of like a lease, but instead of owning at the end for a 10% residual, we mean own it at the end for $1. The monthly payments are a little bit higher, and depending on the cost, taxes might not be as advantageous for it, but you'll own it at the end for no hassle.
Get a Quote to Find Out Your Rates to Finance a Skid Steer
Loan payments are about 8 percent more than lease payments - so you can pretty much take the examples above and add $50 - 90 for them (if you call us we're happy to show you the difference in payments between a loan and a lease for the equipment you're looking at and your credit profile).
Pros Of Equipment Loans
Drawbacks of Equipment Loans
One thing should be mentioned about loans and leases - we have included payment examples based on 5 year loans and leases - that doesn't mean a 5 year loan is the best option - if I went over every single time frame and every single credit profile, you'd be pretty bored.
In general, if you are new or have poor credit, you should pick the shortest time frame you can afford for your financing - for example, with a new business financing $25,000 over 5 years on an equipment loan will run about $840 a month and culminate in total payments of $50,400.
That same business doing the same loan, but for 3 years would end up paying $1,120 a month ($280 a month more) but culminate in total payments of $40,302 - or about $10,000 in savings.
On the other hand, businesses with good credit are usually much better off stretching that payment out as long as possible - the savings for the best qualified business on 5 years vs. 3 years is only about $2,700.
If you are planning on using an equipment loan or lease to buy your skid steer, we can help. Simply contact us or give us a call at (866) 631-9996 to learn more.
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