As a contractor, you know your business is only as good as the equipment you have to use on the job. Since you are always in competition with other contractors within your area, you know having the very best essential equipment can mean the difference between business success or failure. Unfortunately, the equipment you need does not come cheap. If you’re wondering how you can fund your company’s most vital pieces of equipment, here are some tips to remember.
Maintain Good Credit
First of all, always try to ensure your business maintains good or excellent credit. Doing so makes it very easy for you to obtain financing at lower interest rates. Whether you get a bank loan or other type of loan, a good credit rating will let you finance the complete cost of your equipment and have a reasonable repayment schedule, giving you peace of mind.
Consider Credit Cards
Although these should not be your first choice for funding your equipment, credit cards can be a lifesaver when money gets extremely tight. Though they do have high-interest rates, credit cards can give you flexibility in terms of how much you pay each month. Once business picks up, you may find out you are able to pay off credit cards faster than you anticipated.
Lease Your Equipment
Rather than worry about buying essential equipment outright when your money is tight, consider the benefits of leasing. For starters, leasing usually does not require you to have a sizable down payment on the equipment. Also, the company from which you lease your equipment is usually responsible for making repairs, which could save you a large amount of money. Finally, at the end of the lease, you’ll have the option to buy the equipment or return it to the company, allowing you to perhaps get newer equipment.
Use Cash if Possible
While you can use cash to pay for your company’s most essential equipment, you should only do so if your cash flow is very strong and your company’s profits are soaring. Otherwise, if you tie up much of your company’s cash in equipment, you could find yourself having problems meeting other financial obligations, including your company’s payroll.
Take Care of Your Equipment
Once you have purchased your equipment, it is vital that you maintain it to avoid paying for costly repairs or replacements. For example, microtrenching equipment can last for a long time with proper upkeep. While blades can dull and rust over time, taking time to regularly clean and sharpen them will help them last longer. Take some time to learn how to care for your business’s tools to extend their lifespan.
Since you never want your contracting business to be without the most important pieces of equipment needed in any job, it’s important that you be flexible in terms of the funding options you may need to use along the way. Whether it’s a loan, credit card, or other funding options, use good judgment as you make key decisions about your business.