Whether you have a snow removal business or your job requires removing snow, you need the right equipment to do it as efficiently and cost-effectively as possible. In this article we tell you how to finance snow removal equipment, so you can find the best solution for your business in the short and long term.
Need to finance your snow removal equipment?
What type of snow removal equipment can you finance?
You can finance new and used equipment to remove snow and ice from roadways, parking lots, construction sites, or any work space, public or private, that requires large amounts of snow removal:
- Snow plows and tractor plows
- Snow sanders
- Salt spreaders and salt trucks
- De-icers and ice scrapers
- Snow sprayers and snowthrowers
- Snowblowers
- Tailgate snow spreaders
- Rotary snow brooms
- Snow dump boxes
- Skid-steer loaders, all-wheel steer loaders, backhoe loaders, mini track loaders
- All kind of winter service vehicles
These are the most common examples, but if you have other types of snow removal equipment in mind, feel free to contact us to ask if you can finance it. At Finco we have extensive experience in financing snow and ice removal equipment for businesses like yours.
How can you finance your snow and ice removal equipment?
Adding professional snow removal equipment to your business can be expensive. Making an equipment purchase can have a huge impact on the cash flow of your business. On the other hand, the seasonal rental of snow removal equipment can be prohibitively expensive.
For this reason, there are two popular forms of financing this type of equipment: loaning and leasing, which we will explain in more detail below.
Snow removal equipment loan
A loan is a valid option, but many businesses discard it in favor of leasing for the following reasons. In a loan agreement, you are responsible for the ownership and maintenance of the equipment, with all expenses involved.
With the loan, the monthly payments on the snow removal equipment would be the amount of money you pay back to the lender or bank each month. This amount will depend on the total cost of the equipment, the term of the loan and the loan fees, and interest rates.
You must also deliver a collateral pledge, which the lender will use in case you don’t pay back your equipment. And a down payment, which is usually a significant portion of the total cost.
On the loan side, you’ll get tax write-offs for the interest you pay on your loan, and because you own the equipment, you’ll amortize it over its expected lifespan. This implies that you’ll claim the annual amortization as a tax deduction according to the Canada Revenue Agency’s Capital Cost Allowance.
You’ll also increase the exposure of your credit score.
Snow removal equipment leasing
Lease solutions are a simple, efficient, and usually a more cost-saving financing option for companies like yours.
The monthly payment is calculated according to the lease agreement you signed. It works like a rental, with fixed payments, which always helps in the financial planning of any business.
The ownership of the equipment, in a lease term, belongs to the financing company. The leasing contract may include a purchase option at the end of the deal.
It’s all about making it easy, so you can get your tasks done, or get those snow removal contracts you want. We are here to help you. We have more customers like you.
With a lease there is no collateral need since the equipment leased serves as collateral.
There can also be tax benefits related to leases. You can write off the full portion of your lease payments as an expense. Financing equipment through leasing is, therefore, a great option as lease payments are 100% tax-deductible, providing a huge fiscal advantage while helping your business’s cash flow.
For similar reasons, with lease agreements you keep your bank borrowing capacity and a healthy credit score.
Final thoughts
Purchasing the snow removal equipment your business needs doesn’t have to be a hard task, especially if you’re leasing. At Finco Financial Group, we believe in businesses like yours that are committed to their service. That’s why we offer you a simple process for getting your equipment financing, with an easy lease application, so you can focus on getting your business on track.