Construction equipments like a dump truck, front loader, forklift, cranes, compact excavator, bulldozer, backhoe loader, carrying trucks, etc. are the essential parts of the constructing buildings, making and modifying roads, airport, port and so on. These equipments are very costly, so that every developer or construction, farm can not afford to buy them all. So they go for financing of equipments without hampering the quality of their project. It will balance between the incoming and outgoing of the cash flow. According to the needs, the financing companies will set an agreement, either to lease the equipments to keep with you till the end of the project or renting for a short duration whether it is needed. By this you will be benefited for a tax deduction, mothly flexible and manageable pay back, VAT payment by monthly instalment rather than the purchase price. The interest rate is 12% to 16%, depending on business size and bank or financing company’s principle; processing fees are approximately 0.5% of gross loan amount.
Now the question is who will be eligible for construction equipment financing? Firstly, fresh loan applicants gets preference, three to five years experience will add value, ownership of at least two equipments, true partnership paper with the last two years financial audited reports, tax upgradation and minimum one year repayment track.
If you have these terms and conditions cleared, then you can apply to you National ID, photographs, present and permanent residence proof, income tax certificate, current solvency and contract copies, existing equipment ownership proof, pro forma invoice with providing application form.
After the sanction of loan, you can apply for a monthly basis loan for 12 months that will release your burden. You can easily skip some monthly instalment payment in your difficult months.
Leasing of construction equipment can also help you to have free cash in the hands and liquidity. But before leasing or any other type of equipment financing option – you need to consider the effects of overall cost, down and monthly payments, cash on hands issues for managing your cash flow:
These links will help you to gather information about all types of construction, agriculture, food and beverage, consumer products, heavy machine manufacturer’s lists and details.
Featured Leasing Companies in USA are:
- E time payment
- Crest Capital
- Blue Bridge
- NFS Leasing
- American Capital
However, leasing equipment also has a drawback. If clients fail to adequate financing or fail monthly payments, this will hamper to complete project in due time. As a result, the reputation and quality of the work of the contractor will be a question.