Construction equipment financing: why hiring is safer
Mike Chappell, Director in Financing for Construction at Lloyds Bank Commercial Banking, spoke to The Guardian in relation to how Brexit could affect construction equipment financing.
“The headwinds prompted by the EU referendum a year ago continue to challenge the sector. Input price inflation is still an issue and there remain concerns about how the UK’s exit from the EU will affect construction firms, given their reliance on European labour.”
At Aggreko, we understand that financial management and accounting for the construction industry could be impacted by economic changes post Brexit. Currency volatility, import and export issues, and potential resource shortages could impact on the construction industry itself as well as your business’ bottom line.
With a high level of uncertainty surrounding the deal it’s difficult to know what preventative steps to take to maintain momentum and prosper. At a time when we’re awaiting answers to key economic questions, how can you ensure you’re taking reasonable steps to prevent cashflow issues and offset resource problems?
Where resource costs may increase depending on the outcome of the trade deal, there are steps you can take to prepare, putting you in a healthy position before any changes start to take impact. Take the cost of reliable construction site power for example. Is on site power currently a part of your capital expenditure?
Here’s why you should consider consciously making your onsite power costs part of your OPEX instead of CAPEX.
Why choose construction equipment rental over purchasing outright?
Hiring temporary power supply for construction sites could play a part in your plans for construction equipment financing while reducing risk. Why? Making your temporary on site power a part of your operating expenses could be a more cost-effective model. Hiring as and when you need it, instead of investing a large amount of capital upfront means that your cashflow is not impacted and you have a flexible solution that adapts to your requirements.
What’s more, making a conscious decision to hire specialist equipment instead of purchasing outright means that you’ll benefit from tax deductions. Deducting operational expenses reduces income tax and leaves you with the equipment you need for growth. Meanwhile, your cashflow remains healthy, and the cost of the hired equipment is neatly spread out and easier for you to handle.
Shifting from a traditional CAPEX model to making the most of OPEX will help you to build a more sustainable financial plan and make the most of tax deductions. Not to mention, the ability to become more agile in the way that you invest.
What are the key benefits of construction equipment rental?
Power, heating and drying equipment for construction sites can come at a considerable cost. So it makes perfect sense to investigate a more cost effective rental solution. Here’s why construction equipment rental could benefit your business:
- It gives you more flexibility in emergency situations. At Aggreko, we pride ourselves on getting equipment on site as fast as the next day, removing all the hassle for you so you can focus on your project and its deadline. Italso allows you to cost-effectively scale up or down as and when you need to. Instead of making a high cost purchase when your situation changes, hiring means you’re able to adapt to your circumstances and keep costs at a minimum.
- It takes the pressure off you, as a third party provider handles the hassle. Our expert engineers can offer Aggreko Remote Monitoring support for repair should you need any further assistance. That’s the maintenance, servicing and fuel. No need to worry about monitoring equipment and repairs so you can get back to managing your site.
Hire more, risk less
You don’t need to make a big investment when it comes to construction site power. When you need emergency or additional power, heating solutions or cooling equipment, hiring the equipment you need is made simple with Aggreko. Reap the benefits of hiring construction site generators, heating or cooling equipment, without the pressure of making a risky investment.
At a time when CAPEX could be risky for business, relying on an agile solution is vital. That’s why choosing a smart OPEX model could be the right choice for your business. Make a sound choice with your daily operating expenses when you hire our power generators, heating systems and cooling equipment, safely spreading the cost of vital equipment.
Find out how our expert construction team at Aggreko could support your company behind the scenes when it comes to construction site power.