Buying equipment is hard on your company’s finances. If you’re not ready to make that financial commitment, leasing a forklift may be the best option for you. To fully understand what you’ll gain from this arrangement, go over the pros and cons that come with a leased equipment.

Pros

• Cost-savings. Leasing cuts down on your buying expenses. This is an ideal solution if you’re starting out in the business, as it keeps your purchases to a minimum. If you want low upfront costs, getting a lease is the right option for you.

• Easy upgrades. Another advantage of leasing an equipment is that you can trade it for a better and newer machine once the rental period is up. You’re not tied to that machine forever.

• Less commitment. That means you have the freedom to explore other options. If you’re not satisfied with the equipment, you can keep trying other models until you find one that suits your needs.
• Better cash flow. Your money won’t be tied to the machine, which is a depreciating asset, the Business says. With a leased equipment, you have more funds that you can use to keep your business afloat until the market picks up your products or starts trying your services.

• Tax perks. Leasing is a tax-deductible cost. Check if this applies in your state. Take advantage of the cost-savings you’ll get from this operational expense, The Balance says.

Cons

• Restrictions. Leasing the machine comes with certain restrictions as to what you can and can’t do with the forklift. You’ll need to comply with those restrictions if you want to prevent any extra charges.

• Delays. Waiting times. One thing that’s troublesome about renting a piece of equipment is that you need to wait until the forklift is available. If it’s still out because someone beat you to it, you’ll need to deal with the delays, which could impact your productivity.

• Not an Asset. If you plan on applying for a loan, you won’t be able to use the forklift as an asset.

• Lock-in. If you’re not careful, you may end up getting locked into a contract that’s longer than what you need. Always read the terms and conditions before you agree. If there’s a lock-in period, assess your situation. If you’re not certain yet that you’ve found the right
model, keep from signing on that document. Look elsewhere.

• Poor maintenance. The leasing company maintains and cares for the unit. If they’re bad at it, though, that leaves you with a machine in poor condition. One way to work around that is to do your homework and choose a reputable leasing company.

Making a Choice

There are plenty of pros and cons to choosing a forklift lease. The best way to decide if this is the right choice for you is to consider your needs. If leasing a piece of equipment provides you with the cost-savings and support you need, then make that choice. If you expect to grow your business, a lease will also prove much more flexible for you.