One of the key challenges new construction firms have to face is to identify which assets to purchase and which ones to lease.
For scaffolding, experts recommend leasing if the project will last less than three months, if the build has an awkward shape, if the building work is over six metres, or if the company’s personnel do not or cannot erect their own scaffold.
Investing in scaffolding, on the other hand, is highly recommended if the project timeline will exceed three months, if the average height of the scaffold is six metres or less, and if the build has a straight elevation.
These are merely recommendations and there are several other factors that may need to be considered in order to arrive at a suitable decision.
Asset financing allows companies to pay for their purchases on a monthly basis instead of paying for these in one large payment. Spreading out the repayments over the course of an agreed-upon time frame is ideal for companies with limited capital but are in dire need of new equipment like scaffolding.
At the end of the contract period, ownership of the asset is transferred to the construction firm. But before this, the finance company owns the asset and effectively reduces some of the risks of ownership.
For construction firms keen on buying their own scaffolding, one option they can consider is scaffolding finance. As an alternative to an outright purchase or other funding options, this type of asset finance offers a few distinct advantages.
Asset finance offers construction firms a high degree of flexibility in terms of the finance and repayment terms.
Investing a substantial amount of capital toward the acquisition of equipment carries a substantial amount of risks, especially for small and newly founded construction companies. Through asset finance, these companies can acquire the equipment they need while enabling them to preserve their capital.
Efficient cash flow management
Allocating a portion of a company’s capital toward the purchase of equipment and tools like scaffolds can result in fluctuations in the budget. Asset finance shields construction firms from this problem while helping them better manage their cash flow.
Access to the latest equipment
Asset finance allows companies to purchase the latest available equipment which utilise the latest technologies without compromising their budget and cash flow. In turn, this allows the company to stay competitive.
Purchasing equipment carries a few risks, including asset management and obsolescence. Through asset financing, construction firms can avoid these risks.
If you wish to learn more about how you can take advantage of asset finance to acquire new equipment for your construction firm, do not hesitate to contact us at Portman Asset Finance. We’ll be happy to help you and to provide advice.