Boom Lift Financing & Leasing

Boom lifts, essential equipment for industries such as construction, maintenance, and warehousing, can be costly to purchase outright. Financing or leasing a boom lift allows businesses to acquire this equipment without straining their budgets, providing flexibility in terms of payments and ownership options.

What Is a Boom Lift?

A boom lift is a type of aerial lift used to elevate workers to high, hard-to-reach places. They come in different models, including:

• Telescopic boom lifts: Extend straight up and are ideal for reaching high vertical locations.
• Articulating boom lifts: Feature jointed arms, allowing for greater maneuverability around obstacles.

Boom lifts are commonly used in construction, maintenance, repair, and warehouse operations where working at heights is necessary. However, due to their high costs (ranging from $30,000 to over $100,000 depending on the model and features), businesses often consider financing or leasing options.

Financing vs. Leasing a Boom Lift

• Financing: Involves taking out a loan to purchase the boom lift, with repayments over a set term. The business owns the lift once the loan is fully paid.
  • Pros: Full ownership, potential tax benefits, asset depreciation.
  • Cons: Higher monthly payments compared to leasing, responsibility for maintenance and repairs.
• Leasing: Renting the equipment for a fixed period, with the option to return or upgrade at the end of the term.
  • Pros: Lower initial costs, easier upgrades, and possible maintenance inclusion.
  • Cons: No ownership unless you opt for a lease-to-own model, long-term costs can be higher.

Types of Boom Lift Financing and Leasing Options

1. Term Loans:

   • Overview: A lump sum loan for purchasing the boom lift, repaid over a set period with fixed or variable interest.
   • Pros: Ownership after loan repayment, asset value increases.
   • Best for: Businesses wanting long-term ownership and having stable cash flow.

2. Equipment Leasing:

   • Overview: Leasing the boom lift for a set period with fixed monthly payments.
   • Types of Leases:
     • Operating Lease: Use the lift for a short period, returning it at the end of the lease.
     • Capital Lease (Lease-to-Own): Option to purchase the boom lift at the end of the lease term.
   • Best for: Companies needing flexibility and wanting to minimize upfront costs.

3. Lease with Purchase Option:

   • Overview: Lease the boom lift with an option to purchase it at a reduced price at the end of the lease term.
   • Best for: Businesses that want flexibility but anticipate owning the lift in the long run.

4. Equipment Line of Credit:

   • Overview: A revolving credit limit that allows you to draw funds to purchase or lease equipment as needed.
   • Best for: Companies that need flexibility to acquire multiple types of equipment over time.

5. SBA Loans:

   • Overview: Small Business Administration (SBA) loans provide favorable terms for equipment purchases like boom lifts.
   • Best for: Small and medium-sized businesses that qualify for government-backed loans and need to finance large equipment purchases.

6. Vendor Financing:

   • Overview: Some boom lift manufacturers and dealers offer in-house financing, allowing you to finance the purchase directly through them.
   • Best for: Businesses that want to simplify the process and take advantage of manufacturer deals.

7. Sale-Leaseback:

   • Overview: If you already own a boom lift but need cash, a sale-leaseback allows you to sell the equipment to a leasing company and lease it back.
   • Best for: Companies needing immediate cash but still requiring the use of their boom lift.

Benefits of Boom Lift Financing and Leasing

1. Preserve Cash Flow:

   • Leasing or financing spreads out the cost of expensive equipment, preserving cash flow for other business operations.

2. Access to New Equipment:

   • Leasing provides flexibility to upgrade to the latest models, ensuring your business uses the most efficient and safe equipment.

3. Tax Benefits:

   • Lease payments are often deductible as operating expenses, while financed equipment can be depreciated, potentially reducing tax liabilities.

4. Predictable Budgeting:

   • Fixed monthly payments allow businesses to better manage their budgets and cash flow, without large upfront expenditures.

5. Ownership Options:

   • Financing results in full ownership, adding a long-term asset to your company’s balance sheet. Lease-to-own agreements also provide a path to ownership with lower upfront costs.

Key Considerations for Boom Lift Financing & Leasing

1. Creditworthiness:

   • Your business’s credit score will impact the interest rates and terms you can qualify for. Strong credit typically results in better terms.

2. Business Financials:

   • Lenders and leasing companies will require detailed financial statements to assess your company’s ability to repay a loan or make lease payments.

3. Equipment Lifespan:

   • Consider how long you will need the boom lift. If it will be used for long-term, heavy-duty operations, purchasing may be more cost-effective. For short-term or occasional use, leasing may be a better option.

4. Maintenance and Repairs:

   • When financing, your business is responsible for all maintenance. Some leasing agreements, especially with newer equipment, may include maintenance packages, reducing the burden of repair costs.

5. Down Payment:

   • Financing typically requires a down payment (ranging from 10% to 20%), while leasing may not. Consider your cash flow and budget when choosing between financing and leasing.

6. Tax Implications:

   • Discuss with a tax advisor the potential tax benefits of leasing vs. purchasing. While lease payments may be fully deductible, financed equipment can provide depreciation benefits.

Steps to Secure Boom Lift Financing or Leasing

1. Assess Your Needs:

   • Determine whether you need the equipment for short-term or long-term use and how often you will use it. This will help you decide between leasing and financing.

2. Gather Financial Documents:

   • Prepare your company’s financial statements, tax returns, and other documentation needed to apply for financing or leasing.

3. Compare Lenders and Leasing Companies:

   • Research different lenders and leasing companies to find the best terms. Compare interest rates, payment plans, and fees.

4. Submit an Application:

   • Once you have chosen a lender or leasing company, submit your application with the necessary financial documentation.

5. Review the Terms:

   • Carefully review the loan or lease agreement before signing. Ensure that the payment terms, interest rates, and any fees are manageable within your budget.

6. Acquire the Boom Lift:

   • After approval and signing the agreement, you can proceed with acquiring your boom lift.

Conclusion

Boom lift financing and leasing provide flexible solutions for businesses needing expensive equipment but wanting to preserve cash flow. Whether you’re looking for long-term ownership through financing or short-term flexibility through leasing, the right option will depend on your business needs, financial health, and equipment usage. By selecting the appropriate financing or leasing option, your business can ensure access to the necessary tools for operational success without overextending its budget.