When it comes to sourcing the right forklift for your business. There are many different things to consider such as load capacity, lift height, fuel preference, type of tires, and operator comfort, just to name a few. But what is often one of the most neglected things that people overlook, is forklift finance.
We wanted to take you through how to choose the right forklift finance for your business.
How to choose the right forklift finance
Capital Purchase
The most obvious way is to pay for your forklift up front, with your own capital. Depending on what type of forklift you are financing, new or used, small or big. This often involves either you going to a bank and financing the full amount with a bank loan or taking the money out of your own account and paying for it.
When you buy a forklift outright, you are responsible for all the repairs and maintenance.
Fully Maintained Rental
The fully maintained rental option has now become one of the most popular ways to purchase a forklift for many different businesses. All forklift companies will have a forklift rental fleet.
A fully maintained rental involves entering into a rental agreement, from anywhere from 1 day to 7 years, and paying an agreed upon rental figure.
The forklift rental figure will include things like maintenance, a set of tires per year, and support forklifts in case of breakdowns. The great thing about a fully maintained rental is that you get to give the forklift back at the end of the term.
Lease Finance
Forklift Finance with leasing means going to a financial institution like a bank and entering into a leasing agreement with the financial institution over an agreed-up timeframe.
This usually involves a monthly lease payment, which might have a residual payment at the end of the term, and any maintenance is your responsibility.
There are two main different types of leasing an operating lease and a finance lease.
Rent Then Buy
One particular popular method of Forklift Finance is a rent-then-buy scenario, or what is better known as a Commercial Hire Purchase (CHP) or Chattel mortgage.
Generally, there are balloon payments at the beginning or at the end of the loan. Very similar to a leasing arrangement, the terms are generally anywhere from 1 to 5 years.
The servicing and maintenance of the forklift are treated separately in these circumstances.
When it comes to the right type of forklift finance for your business, if you are unsure first talk to your accountant about your own particular circumstances.
No matter if it’s a cheap second-hand forklift option or a fleet of forklifts. Take the time and talk to your forklift provider after your accountant.
Leave a Reply