3 Strategic Ways to Acquire Material Handling Equipment on a Budget
As the rate of economic expansion has increased so has the demand for specialized construction equipment. Much of 2020 bought a fast upward trajectory to a standstill but the tide is turning quickly. With vaccines being formulated to combat COVID 19, economic upturn is just around the corner.
Construction equipment contractors or vendors will be operating at full capacity very soon because of this. The acquisition of material handling equipment will certainly be a top priority especially if your fleet is underdeveloped. But the staggeringly high upfront costs make this a tough decision.
Thankfully, there are many ways you can stretch your budget when it comes to acquiring new equipment.
And in this article, we’ll show you how to do just that. We’ll run through the types of material handling equipment you might require, we’ll go over the options at your disposal, and will tell you why private financing could be your best bet.
The Types of Material Handling Equipment at Your Disposal
Material handling basically refers to the loading, unloading, and movement of goods within a factory or warehouse with the aid of mechanical devices. There are many iterations of machines that carry out such processes. Their classifications and examples include:
Storage and Handling Equipment
- Stacking frames
- Cantilever racks
Bulk Material Handling Equipment
- Stackers and reclaimers
- Grain elevators
- Bucket elevators
- Conveyor belts
- Dump trucks
- Screw conveyors
- Rotary car dumper
- Hand trucks
- Side loaders
- Pallet trucks
- Walkie stackers
- Order pickers
- Platform trucks
- Conveyor belts
- Robot delivery systems
- Automated Storage and Retrieval System (AS/RS)
Your options to acquire Materials Handling Equipment (Rent vs Buy or Lease)
Once you’ve decided on the equipment you want to invest in, your next choice is determining whether you want to rent or buy said equipment. This choice will be heavily influenced by your individual circumstances and the lifecycle of your operations.
When You Should Rent Materials Handling Equipment
Renting is a great short-term option. It allows you to get the tools you need quicker and cheaper when compared to buying outright. The amount of time you can actually use the equipment varies on your project and the agreement itself. These are usually quite flexible so finding agreeable terms shouldn’t really be a problem.
This is especially good if you just need a machine for a certain project. If your project requires a small machine you can rent just that for the required time instead of investing significant money. Niche use cases like these benefit the most from renting opportunities.
Another good thing about renting is the fact that you don’t have to deal with the maintenance of the machine. This not only saves time but also lets you save on service costs which can add up over time.
When You Should Buy or Lease Materials Handling Equipment
If you intend on using the material handling equipment for a long time, then buying is for sure the way to go. It ends up being more cost-effective in the long run when you factor in the frequency of usage and the costs of renting. If you have the funds, then investing in certain workhorse equipment pieces that have a wide range of functions is definitely wise.
Besides the cost savings compared to renting, buying is also the more convenient option. You can use the equipment bought whenever you require it and you don’t have to rely on the handler’s schedule or priorities. You can also save time by avoiding having to rent every time you take on a new project as the process can be tedious.
You also have the advantage of getting the exact equipment you need, and you gain the ability to customize it to your liking. You can even change the color to be more suited to your company; something you can’t do with rented machines. And with so many options to buy used or refurbished equipment, buying outright might not even be that costly to begin with.
Leasing equipment can be another way of purchasing equipment. A finance agreement and lease agreement look very similar and both result in you owning the equipment. In the case of a lease agreement, at the end of the term you buy out the lease, usually for a nominal sum such as $1. There are tax advantages to leasing or buying because you can write off the payments on your taxes. (See your tax advisor for more information or guidance on tax matters.)
Why Private Financing Is the Way to Go
Getting a bank loan is an option but we believe privately financing your materials handling equipment through companies like Dimension Funding is your best choice. Here are some reasons why:
- Fixed monthly payments. Unlike banks that put you at the mercy of fluctuating interest rates, private financing lets you choose a low monthly payment for up to 60 months. This keeps unpleasant surprises at a minimum and allows you to plan your finances better and more efficiently as you know exactly what you’re getting into.
- Up to $250k without financial documents. You can finance equipment worth over $250k through an “application only” option. You can get exactly what you’re looking for super quick because of this and if the equipment you need is higher than $250k you just have to provide your financial statements.
- Finance 100% of the costs. Banks only finance the equipment itself. When it comes to the maintenance costs, delivery, and setup, you’re on your own. Private financing, on the other hand, includes all these costs into your application. You get an all-inclusive option that covers everything including the equipment.
- Unsecured. Banks usually require all of your company’s assets as collateral for a loan. Private financing companies only use the asset being financed as the collateral.
Budget constraints shouldn’t be a limiting factor in your expansion. Knowing your options and making smart decisions on how and when to finance your upgrades is all it really takes. Keep your business goals at the forefront of all your decision making and you’ll be on the right track!
If you’re interested in financing your material handling equipment through a third-party vendor, be sure to contact Dimension Funding. You’re only an online application and a quick approval process away from getting a time tested, hassle-free, and convenient financing option for your next equipment upgrade.
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