Forklift finance-8 tips when looking for a forklift loan or lease
Last week I wrote an article about things to watch out for when buying forklifts.
As a result, we’ve had quite a few business owners contact us to find out more about how best to finance their forklift purchases.
While everyone’s situation is unique – and needs to be treated as such – here are some things that you should always consider when buying forklifts:
1. Make sure you choose the right forklift for the job. Sounds logical, but it’s amazing how many people don’t think about this upfront. Read more about buying the right forklift.
2. The shorter the term of the finance the less interest you pay. Which naturally leads to…
3. Finance your forklift over its useful life so you don’t waste money. For example, if you are going to be using the forklift in a steel smelter 24 hours a day it may have a lifespan of only three years rather than 5-10 years in a less ‘strenuous’ job.
4. Speak to an expert about the most tax effective way to finance the machine. Depending on your circumstances, there may be ways to save you more money at tax time.
5. Match the finance to the rental stream that the forklift earns for you. For example, if you have a fleet of forklifts that you rent out to businesses and people, make sure you can get a greater average rent per week for each one than the cost to purchase them.
You don’t want to discover that you can only rent a forklift out for $300 per week while it’s costing you $500 per week in repayments to keep.
6. The lower the residual or balloon the less interest you pay. In other words, by nominating to have less to pay at the end of your term eg $10,000 instead of $15,000 you’ll also pay less in interest along the way.
7. If you are buying a second hand or used forklift, make sure it is less than 12 years old at the end of the finance term. Generally, banks don’t like to finance forklifts that are older than that.
8. Speak to an expert about the most effective facility to finance your machine on ie hire purchase, chattel mortgage, finance lease or operating lease and rental.
As I said, there are many factors to consider to enure you get the best rate and right deal for your needs. Following these tips is a good place to start.
If you’d like to know more about forklift and other industrial equipment loans give the Zenith team a call.