As anyone involved in the industry will testify, boom lifts are by no means a small investment. On the contrary, this is a piece of equipment that will undoubtedly make your business a lot of money – but it can come at a huge up-front cost.
This is the reason today’s guide has been put together. In the nature of today’s industry, it probably won’t come as a surprise to read that leases and other forms of finance are the most common ways of buying equipment like boom lifts. However, you do have to be wary of classic mistakes when pledging your money in this way, which is why we have pieced together the following to pinpoint where so many people go wrong.
Mistake #1 – The finance agreement is too long
This is probably the main mistake in which those who are seeking boom lift equipment financing make.
It’s very tempting to take a long agreement out, as on a month-by-month basis this at least makes the costs lower (even though, over the long term, you will be paying more).
The problem with this approach is that there are plenty of occasions when these loan periods actually surpass the useful life of the equipment. It can mean that some companies are paying for equipment that they just aren’t able to use anymore. Obviously, this is going to impact operations immensely, and means that you might at times be paying for two pieces of equipment; the original (which was subject to the initial loan) and the replacement for said original.
Mistake #2 – Looking for the perfect deal for specialty equipment
One of the most unfortunate issues about equipment financing is that it tends to only benefit those businesses that operate in mainstream field. It goes without saying that boom lift equipment falls into this category, but if you are looking for something which isn’t quite as common, and perhaps only used by a handful of people, it might prove to be very difficult to obtain any form of financing.
The reason behind this is simple. For example, say you are looking to get financing for equipment that makes use of a mold. This mold is very unlikely to suit any other business on the planet. The upshot of this is that if you default on the loan, or by the end of the lease, there is no resale value to the lender. This poses a big problem and immediately means they lose their big piece of bargaining power.
Mistake #3 – Waiting too long to arrange finance
It might be tempting to only raise finance when the chips are low, but you should avoid such a technique like the plague. After all, as soon as your finances start to run low, your bargaining power declines. You are more likely to accept anything that’s put in front of you – rather than a fair deal that might be on the table when you are in a strong financial position.
