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Posted By J.D. Jenks, Global Financial & Leasing Services, Wednesday, September 18, 2019

How the Economic Outlook Affects Lease Financing for Construction Equipment

The Association of Equipment Manufacturers (AEM) recently published an article on the economic outlook for 2020. It stated that while the economy began 2019 rather strong and that the U.S. is in the middle of 100+ months of economic expansion, many thought leaders are forecasting that our hot economy will cool down a bit. Why pump the brakes in the midst of high business and consumer confidence and low unemployment? Rising interest rates, looming tariffs and an inability to hire enough workers, especially skilled labor. 

The Global Financial & Leasing Services (GFLS) team keeps a close eye on economic reports, especially those concerning the industries in which we finance equipment. However, we can gauge the economy’s highs and lows simply by the number of equipment financing applications we receive. Over the past few years, applications have been flooding in from customers who are confident enough in the economy that they’re comfortable spending money. 

Construction Leads the Way

The construction industry – residential and commercial – historically leads the way in a good economy. Of course, building requires construction equipment, so it’s no surprise that the demand for construction equipment financing is high. 

The past few years were good for leasing pre-owned construction equipment. A good economy mean companies can replace older equipment with new, which increases used inventory. There are a number of construction firms leasing their quality, used construction equipment like backhoes, dump trucks, bulldozers, and other heavy equipment in order to offset the cost of purchasing new equipment.

Is Now the Best Time to Finance Construction Equipment?

Despite interest rates, tariff concerns and labor crunches, it is still a great time to finance construction equipment for a few reasons, including:

·     Used inventory is excellent

·     Current low interest rates (but the Federal Reserve recently has raised rates and more increases could be on the way)

·     The quality manufacturing of today’s construction equipment minimizes the risk of the payments outlasting the equipment

AEM reports that the construction industry is expected to experience steady and solid growth, at least in the short term, though no one can predict the impact of any unforeseen circumstances or events. Financing construction equipment makes sense for many construction firms right now.

READ: Why Put Profit Above an Equipment Lease Payment?

GFLS helps small and medium-sized businesses finance construction equipment leases, even those with less than perfect credit and who have been turned down by other equipment financing providers. Get started today with an application or contact our team for more information.

Financing an Excavator

Even if You Have Bad Credit

With construction leading the way in our current economy, it’s no surprise that small and mid-sized companies are taking advantage of the boom and investing in heavy equipment like excavators. These machines help them take on projects previously out of their reach. Also, financing new or gently used excavators beefs up a company’s fleet. However, excavators are a serious investment and purchasing outright is a large capital outlay. This makes buying outright out of reach for many business owners who don’t have that kind of capital or prefer to keep it on hand for other purposes. 

Comparing New and Used Excavator Costs

If you’re financing a new, a full-sized excavator, the cost can range generally between $100,000 to $500,000. In general:

  • Small excavators (10 to 15 tons) cost between $80,000 to $150,000
  • Mid-sized excavators (15 to 20 tons) range between $100,000 to $200,000
  • Large excavators (30 to 40 tons) run from $200,000 to $400,000  

 

Accessories, if needed, will be an additional cost. Most excavators come with one bucket, however, your typical jobs may require multiple or different-sized buckets for which you’ll need to budget an additional $1,000 to $5,000each. Attachments such as rakes, blades and hydraulic hammers can add $5,000 to $10,000each to the cost. 

The high cost of new equipment and a good economy have created an excellent market for used excavators, putting them in reach of many small and mid-sized companies. Used excavators can be had at a significant discount. A gently used excavator with less than 2,000 hours of use might sell for 25 percent less than the original price – a great deal considering these machines have lifespans of up to 10,000 hours or more.

READ: Why Put Profit Above an Equipment Lease Payment?

Financing Your New or Used Excavator

Whether this is your first excavator, your fifth or you’re taking advantage of the great used inventory to upgrade, excavator financing from Global Financial & Leasing Services (GFLS) can help. If there is anything more important than getting the right excavator for your company, it’s working with the right lease financing company with experience in heavy construction equipment financing. 

That’s where excavator lease financing from GFLS comes in. Our team can help you acquire essential equipment when you want to retain your capital for other things or bad credit makes you risky on paper to other lenders. 

READ: What to Expect if Your Credit Score is Under 750

Get Excavator Financing Through GFLS

Since 2009, GFLS has been providing excavator lease financing for small and mid-sized businesses across the U.S. Our customers count on us to help them obtain the heavy construction equipment they need to compete in their area and take their companies to the next level through:

·      A fast, easy excavator financing process

·      Dealing directly with financing decision makers

·      Our willingness to look beyond a credit score to your “story”

·      Reliable, ongoing communication 

·      Equipment financing decision made in <2 to 24 hours

·      A financing culture based on respect

We know what a difference a day can make for companies that need to get excavators on the job. Start the applicationtoday and the GFLS team will move heaven and earth to approve your excavator financing in as few as 24 hours. Have a question about heavy construction equipment financing? Contact our teamfor answers.

 

Josh Shull

480-478-7413

Global Financial & Leasing Services, LLC

8800 N. Gainey Center Drive, Suite 270

Scottsdale, AZ  85258

www.gfrservices.com

 

 

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