Facing Financial Challenges With Equipment and Vehicle Fleet Leasing

Nearly every industry is currently coping with the effects of supply-chain and labor-shortage issues. Though there has been some relief in both areas, costs for business owners remain high and continue to increase due to inflation. For the construction trade, managing increased material and project costs minimizes profits and cuts into funds that might be allocated to replace or upgrade tired vehicles and equipment. As manufacturers’ backlogs begin to shorten, business owners must be strategic in financing these expenses when replacement inventory is finally available.

To curb rising costs, business owners and their fleet managers may have stretched their replacement cycles and increased preventative maintenance costs to keep older equipment, trucks and vans in service for longer than expected. Unfortunately, putting off inevitable upgrades or replacements can only last so long. When short-term repairs are no longer practical, some budgeting factors should be considered with the support of an experienced financing partner.

Lowering Costs With Vehicle and Equipment Leasing

It’s no secret that equipment for the construction industry comes at a hefty cost. Paired with rising interest rates and the increasing price of vehicles, businesses that need both are faced with significant expenses. While cushioning the company’s bottom line is important, within construction, some of these expenses can’t be avoided for too long without the risk of potentially delaying projects or being unable to take on new work.

So, what are the options? Purchasing equipment and vehicles outright generally requires tying up credit lines or utilizing necessary cash. Leasing can offer alternatives that many haven’t considered. Equipment leases can be structured like a traditional loan in which ownership transfers to you at the end of the term, or they can be tailored to provide a structured replacement cycle that minimizes downtime, maintenance and repair costs. Likewise, utilizing a lessor with vehicle fleet-management tools will also create replacement cycles that limit maintenance and repair costs and provide the latest, safest and most economical fleet, and can also improve employee retention.

By leasing, business owners typically spend less on their monthly payments and can have the peace of mind that their vehicles and equipment will stay reliable. The right fleet-management lessor can also provide 24/7 fuel and maintenance support to help control costs and keep the vehicles properly maintained and on the road. For construction companies with specific needs, the right leasing partner can add the cost of vehicle conversion and upfitting into the monthly payment.

Prioritize Financial Partnerships

The best way for owners to ensure they get the right financing option for their construction business is to find a specialized financing partner. Many options are available, so if time allows, business owners should shop around to choose the right partner to meet all of their company’s vehicle and equipment needs. A partner offering customizable lease terms and guidance throughout the leasing process gives business owners the support and flexibility needed to navigate the challenges of acquiring new equipment and vehicles. The right partner will make the leasing process less of a burden and more of an opportunity.

As the persistent effects of supply-chain and labor issues continue to present financial problems for the construction industry, ensuring the viability of machinery and equipment that keeps projects moving should be a top priority. At The Bancorp, the commercial lending team regularly works with business owners nationwide to offer equipment and fleet leasing for nearly every industry. The team works directly with companies to understand the needs of the business and provides lease plans tailored to each company’s unique requirements. With this level of extra support, construction business owners can successfully maneuver through budgeting challenges in an unpredictable market.

VIsit The Bancorp’s website to learn more