Heavy equipment leasing can be a great way in 2023 for business owners in different industries (such as construction, forestry and mining) to get the equipment they need without having to pay up front. However, there are some things you should know before signing a lease. Here are four tips to help you get the most out of your leasing experience.
Do you need heavy equipment in 2023?
What is heavy equipment leasing?
Leasing is a financial service that can only be used for business purposes and is used to acquire new equipment or machinery.
The leasing contract is in fact a tripartite agreement between a lessee (the tenant), a lessor (the one who offers the financing) and a third party (the one who sells the goods to the lessor).
Leasing: a tool for the growth of your mining, forestry or construction business
It’s an alternative solution with cash flow and tax benefits that allows companies to carry out operations that they wouldn’t otherwise have the necessary resources to perform.
What type of heavy machinery can I finance with leasing?
Many types of heavy equipment can be financed with leasing. Depending on your needs, certain aspects, such as possible term options, may vary.
Here are some examples of heavy machinery that you can finance:
- backhoe loader.
- Wheel loader.
- Hydraulic shovel.
- Concrete mixer.
- Boom truck.
- Forklift truck.
- Hydraulic broom.
- Wheel or track loader.
et beaucoup plus encore!
What are the benefits of leasing for heavy equipment financing?
You maintain your bank borrowing capacity
LEasing doesn’t affect your ability to borrow from banks. This means that the amount of your lease will not increase your bank borrowing capacity, allowing you to maintain your capacity while financing the heavy equipment you need.
You can benefit from tax advantages
With this type of financial service, your monthly payments are 100% deductible as an operating expense, unlike a purchase. This is a significant tax benefit that businesses can take advantage of to maximize their returns and give themselves the means to grow.
You can get quick approval responses
At least at Finco, we are confident that we can get you approved within 48 business hours, often the same day. In all cases, we work as efficiently and quickly as possible.
Sales tax paid on the term
At the time you transfer your heavy equipment registrations, our lenders pay the sales tax for you. This means you can keep that money in your account and pay the tax on the payments throughout the term.
FAQs regarding leasing of heavy equipment
How to account for a heavy equipment lease?
From an accounting standpoint, leasing gives rise to the recording of a royalty according to the periodicity provided for in the contract and, if the purchase option is exercised at the end of the contract, to the recording of a new asset. Certain information must also be included in the accounting notes
How to calculate the lease of heavy equipment?
The best way to know the periodic payment of the lease is to contact us and we will propose to you the best possible conditions, adapted to you and your project.
Does Finco work with the mining sector?
Yes, we have specialized programs in the mining sector, as well as other sectors that require heavy equipment, such as forestry, construction or agriculture.