Forklift Finance Options
When it comes to sourcing the right forklift for your business, there are some many different things to consider such as : load capacity, lift height, fuel preference, tyres options, ergonomics and this is just to name a few. But what is often one of the most neglected things that people overlook, is forklift finance.
The most obvious way is to pay for your forklift up front, with your own capital. Depending on what type of forklift you need to finance; new or used, small or big. This means either meeting with your bank and financing the full amount with a loan or taking the money out of your own account and paying for it.
Fully Maintained Rental
Fully maintained lease is one of the most common forms of forklift ownership because it is affordable and assists businesses with ongoing costs of maintenance. The leasing periods can range from 12 months up to 7 years depending on the materials handling needs forecasted for your business.
The rental payments are usually charged every month and will include scheduled maintenance, spare part support and break down assistance when needed. The great thing about a fully maintained rental is that you get to give the forklift back at the end of term. Essentially you have the same experience of owning the forklift without the responsibility of the costs involved with maintenance because the leasing company covers these charges in the monthly rental fee.
Forklift Finance with leasing, means going to a finance institution and entering into a leasing agreement with a third party financier over an agreed up timeframe.
This usually involves a monthly lease payment, which might have a residual payment at the end of term, and any maintenance costs on the forklift are your responsibility.
There are two main different types of leasing an operating lease and a finance lease.
Rent Then Buy
One particular popular method of Forklift Finance is “rent to buy”, or what is better known as a Commercial Hire Purchase (CHP). Generally these include balloon payments at the beginning or at the end of the loan. Very similar to a leasing arrangement, the terms are generally anywhere from 1 to 5 years. The servicing and maintenance of the forklift is treated separately in these circumstances.
Financing is a decision to make that will suit the businesses short and long term goals as well as your budget. Discussing these options with your accountant will help you make the right decision considering all your options. You may also consider buying second hand if that option covers your materials handling needs.
Lencrow Materials Handling is a holistic materials handling solution service provider with nearly 40 years’ experience across a range of brands and models. We have consultants at all of our branches who would be happy to discuss anything you would like prefer more information about or even just to provide a helpful step in the right direction to materials handling equipment.