Tata Capital Blog
  • Aspiration
    • Home Loan
    • Business Loan
    • Education Loan
    • Vehicle Loan
  • Lifestyle
    • Personal Loan
    • Travel Loan
    • Wedding Loan
    • Consumer Durable Loan
    • Home Renovation Loan
  • Protection
    • Medical Loan
    • Insurance
  • Finance Essentials
    • Loan Against Property
    • Loan Against Securities
    • Wealth Management
    • Trends
    • Government Regulations
  • Moneyfy
    • Investments
  • Business
    • Equipment Financing
    • Equipment Leasing
    • Working Capital Loans
    • Term Loans
    • Construction Finance
  • COVID-19
    • CORONAVIRUS
    • GOVERNMENT UPDATES
    • WORK FROM HOME
    • LOCKDOWN SOLUTIONS
    • FINANCE SOLUTIONS

Archives

  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • July 2017
  • June 2017
  • March 2017
  • January 2017
  • November 2016

Newsletter

Enter your First Name and Email Address below to subscribe to our newsletter

Categories

  • Business Loan
  • Construction Finance
  • Consumer Durable Loan
  • CORONAVIRUS
  • Education Loan
  • Equipment Financing
  • Equipment Leasing
  • FINANCE SOLUTIONS
  • Government Regulations
  • GOVERNMENT UPDATES
  • Home Loan
  • Home Renovation Loan
  • Insurance
  • Investments
  • Loan Against Property
  • Loan Against Securities
  • LOCKDOWN SOLUTIONS
  • Medical Loan
  • Personal Loan
  • Term Loans
  • Travel Loan
  • Trends
  • Vehicle Loan
  • Wealth Management
  • Wedding Loan
  • WORK FROM HOME
  • Working Capital Loans

Meta

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org
Tata Capital Blog
  • Aspiration
    • Home Loan
    • Business Loan
    • Education Loan
    • Vehicle Loan
  • Lifestyle
    • Personal Loan
    • Travel Loan
    • Wedding Loan
    • Consumer Durable Loan
    • Home Renovation Loan
  • Protection
    • Medical Loan
    • Insurance
  • Finance Essentials
    • Loan Against Property
    • Loan Against Securities
    • Wealth Management
    • Trends
    • Government Regulations
  • Moneyfy
    • Investments
  • Business
    • Equipment Financing
    • Equipment Leasing
    • Working Capital Loans
    • Term Loans
    • Construction Finance
  • COVID-19
    • CORONAVIRUS
    • GOVERNMENT UPDATES
    • WORK FROM HOME
    • LOCKDOWN SOLUTIONS
    • FINANCE SOLUTIONS

Construction Equipment Leasing Vs. Financing: Which One Suits Your Business?

by tatacapitalblogOctober 9, 2020 in Construction Finance, no comment
Construction Equipment Leasing Vs Financing

Investment in capital assets is crucial to make scalable strides in the construction industry. If you wish to purchase heavy machinery for your construction business, you primarily have two choices. You can either:

  • Lease the equipment
  • Buy the equipment on loan 

But either choices have both upsides and downsides. In the end, the decision regarding renting vs buying construction equipment question rests entirely on your business operations and financial health.

Before you make a finance choice, consider these factors first:

  • Urgency of the equipment
  • Market value of the equipment
  • Expected time of use
  • Cashflow needs
  • Tax implications

Additional Read: Top Trends in Construction Equipment Finance Market

Below, we compare the various pros and cons of the two finance choices for your perusal.

Pros and Cons of equipment leasing

Most lease terms typically do not require a down payment or collateral, so you can access the required equipment in no time. Even the payment terms offered on the equipment leasing are variable to help you meet your business-specific cash flow needs easily. You have the option to go for construction equipment rental of new equipment or an old one.

Before the lease is over, you can also purchase, return, or replace the equipment with an up-to-date one – based on business necessity. Moreover, you can claim tax deductions on your lease payments or monthly interest payments and reduce your tax burden.

However, equipment on lease is more expensive as compared to equipment loans, especially if used for a long time. In addition to a monthly equipment leasing payment, you will also pay interest but will not have the equipment ownership when the lease is over. Not to mention, equipment maintenance is shouldered by the lender who usually imposes certain conditions for equipment operations.

Pros and Cons of equipment financing

Equipment loans are self-secured loans since they use the equipment as collateral, so you do not have to use your personal or business assets. You can easily qualify for the loan and purchase updated equipment to compete in the market. And once the loan is repaid fully, you will have complete ownership of the equipment.

Most importantly, equipment loans are tax-deductible so you can save a considerable sum on your monthly loan repayments. You can claim depreciation on the new equipment and exemptions on the monthly interest payment of your equipment loan.

However, an equipment loan requires a sizable down payment; if you lack adequate funds, your cash flow will be affected poorly. You will also be responsible to carry out routine maintenance and repairs of the equipment. Therefore, in addition to monthly EMIs, you will have to take care of the maintenance costs as well.

Additional Read: What Vital Role does Equipment Financing Play in Reviving Business in Post Pandemic Period?

Equipment Leasing vs Financing – The Verdict

To make the right choice between equipment leasing vs buying, you must be mindful of your business’ financial health. Both the choices offer a way to use best-in-class, updated equipment but also varied costs. Fortunately, construction finance has become much easier today. For quick, competitive equipment loans or lease options, turn to Tata Capital. We offer customised solutions for most class of equipment. Get in touch for further details.

Share on FacebookShare on Twitter
Previous

Why has the FII and DII flow into equity markets been moving in the opposite direction since a couple of months?

October 9, 2020
Next

Top Trends in Construction Equipment Finance Market

October 9, 2020

Leave a Reply Cancel reply

Related posts

Construction Equipment Finance Market Grow Post COVID

Will Construction Equipment Finance Market Grow Post COVID-19?

by tatacapitalblogOctober 9, 2020no comment
Top Trends in Construction Equipment Finance Market

Top Trends in Construction Equipment Finance Market

by tatacapitalblogOctober 9, 2020no comment
key-policy-initiatives

Key Policy Initiatives for Infrastructure Development and Financing

by tatacapitalblogSeptember 24, 2020no comment

Newsletter

Enter your First Name and Email Address below to subscribe to our newsletter

Recent Posts

  • What is Ecotourism and Why is it important?
  • Ultimate Checklist for Planning a Lockdown Wedding
  • Trending Bridal Lehengas of 2021
  • Top 10 Easiest Schengen Countries to Apply for Visa
  • Top 5 Sustainable Tourism Destinations

Most Popular

  • Coronavirus: Facts vs Myths

    Coronavirus: Facts vs Myths

    March 12, 2020
  • What are the Steps Taken by the Government to Fight Coronavirus in India?

    What are the Steps Taken by the Government to Fight Coronavirus in India?

    April 3, 2020
  • How To Check If you Have Coronavirus?

    How To Check If you Have Coronavirus?

    March 13, 2020
  • Top Ten Best Bikes for Your Daily Use

    Top Ten Best Bikes for Your Daily Use

    December 18, 2019
  • Top 5 Mileage Bikes of Honda

    Top 5 Mileage Bikes of Honda

    October 17, 2019

© 2017 Rever Magazine Theme. All rights reserved.