Many contractors are renting more equipment than they buy.
It’s a no-brainer. Spend less cash and your workers spend more time forming concrete – not coordinating material and equipment. And the real cost of owning equipment like scaffolding or braces is usually more than it seems to be. Using equipment – not owning it – grows profits. When contractors under-use fixed assets, it’s a persistent resource drain.
The operational advantages of using rental equipment give you more options. Contractors that have greater flexibility also have distinct competitive advantages. They can bid on the jobs they want, not just the ones where they own the appropriate equipment to get it done.
Increased Cash Flow and Lower Taxes
A big financial advantage of using rental equipment is making cash more available. When contractors purchase their own forming systems, braces and concrete construction accessories, they don’t have as much ready capital to respond to opportunities or handle surprise expenses. But preserving cash flow isn’t the only financial benefit of renting. Here are some other ones to keep in mind:
- Rentals are an off-balance-sheet item – neither an asset nor a liability. That improves a contractor’s bonding capacity and keeps credit lines available for short term needs.
- Rentals reduce taxable fixed assets. Renting equipment is a deductible expense, so you can fully expense it to a specific job instead of depreciation spanning years and several projects.
- Keep office accounting and administrative costs down. Ownership comes with extensive bookkeeping responsibilities and expenses.
Find out how equipment rental can help you grow your business by calling your local White Cap today. You’ll get straight talk from one of our rent-or-buy experts.