Consider these six advantages to determine if renting is a viable option for you and your business.
Renting compact equipment takes careful consideration and planning, but continues to remain a strong alternative to ownership. As a contractor, there are many benefits of renting compact track loaders, skid-steer loaders and compact excavators (along with attachments) to improve your productivity.
You can easily take on short-term projects, access new revenue sources, use the newest and most advanced equipment, reduce operating costs, minimize downtime, eliminate storage requirements and decide if a rent-to-purchase option is right for you at the end of your rental period. By looking at these six advantages outlined by Jason Boerger, marketing manager for Bobcat Company, you can consider if renting is a viable option for you and your business.
1. Complete Short-term Projects
Prior to adding compact machines to your equipment fleet, consider what type of work you will be completing. For instance, rental may be the best option when taking on new short-term projects.
“In many cases, companies are balancing several projects at the same time. Sharing the equipment among jobsites may not be logistically feasible or economical,” says Boerger. “With certain short-term projects, it may be beneficial to rent. This helps eliminate some of the logistical issues you may have experienced by sharing equipment. It also keeps the resources on site, making it easier to keep the project on schedule rather than waiting on equipment from another site.”
In addition, if your company traditionally operates skid-steer loaders on concrete and asphalt, and the need arises for a project in soft, wet or sandy soil conditions, renting a compact track loader to complete the project may be advantageous because of its increased pushing and digging performance in these ground conditions.
2. Increase Your Business with New Services
Renting an attachment for use with a compact machine may be a good decision if you are looking to expand your company’s services. According to Boerger, a well-paired compact loader or excavator attachment may enhance a project, delay purchasing a dedicated piece of equipment and open up new revenue sources.
“If you use your machines for one task or one job only, you may be missing some profitable expansion opportunities,” Boerger says. “Renting a compact excavator with a hydraulic clamp could help you add land-clearing and site preparation projects, or a hydraulic breaker attachment could help you compete for demolition jobs.”
In addition, in cold weather climates, a skid steer with a snowblower, snow blade or snow pusher attachment could help expand your services into snow removal and provide additional revenue during winter. It may also allow you to keep seasonal employees on your staff during winter when they may be otherwise not working or working for another company.
3. Keep Your Borrowing Power
Financial institutions typically do not treat rental expenses as a liability on your company’s balance sheet. This means rental equipment can help you maintain stronger borrowing power for your business.
Rental costs can often be deductible as business expense, as well. If you were to choose to purchase construction equipment rather than rent, the equipment would need to be depreciated over the life of the machine.
4. Reduce Operating Costs
When you own equipment, you absolutely must take service costs such as maintenance and repairs into consideration and you need to think of it in terms of its entire life cycle.
When renting a compact machine, maintenance is still important, but costs will be significantly lowered when compared to ownership. This allows you to focus on the task at hand and worry less about the overall long-term maintenance plan.
“It isn’t uncommon for rental contracts to include repairs or parts. The rental store or compact equipment dealership should be following a routine maintenance schedule – such as engine oil and filters and hydraulic filter changes – to help promote the machine’s long-term durability,” Boerger points out. “Make sure that you read and understand your rental contract and what is included for maintenance and parts before you sign the rental agreement.”
5. Eliminate the Need for Storage
Making space to store compact equipment or attachments may not be feasible for some contractors. For some, once a project is completed, it is easier to return compact equipment to a rental store or dealership where it can be properly stored. This means it is important to give consideration to the space needed to properly store equipment that is not out for rent, as it can incur additional cost.
6. Consider a Rental Purchase Option (RPO)
Compact equipment and attachments that work longer, harder and smarter than other machines may become permanent additions to your fleet. An RPO is essentially a flexible rental agreement with an option to purchase the equipment with your rental payments going towards the purchase of the machine at a later date. This can be a good plan for those who don’t want to purchase the equipment outright, but may have the need to purchase the equipment in the future.
“If you are considering an eventual machine purchase, it’s important to structure an RPO contract and start a conversation with your sales and/or rental representative to ensure this type of contract is available,” Boerger says. “RPOs may have a higher up-front cost but it helps curb some of the risk. However, if the jobs keep coming in, it can justify the purchase towards the end of the RPO agreement.”
Renting compact equipment and attachments can offer unique benefits to your business, help you better budget for equipment expenses and reduce your overall cost of ownership on a particular project. As you evaluate where your equipment needs stand, the final decision is dependent on what services you want to offer and what projects you are looking to complete in the most efficient and affordable manner.