The pandemic caused a lot of slowdowns for many businesses, but now as we move forward, it’s important to take note of some of the trends that are emerging. Shortages of raw materials, shipping disruptions, insufficient available labor, and additional circumstances are all leading to increased prices on goods and materials. This is especially true in the construction industry.
This means that the price to purchase equipment, both new and used, has also increased. Your company can use construction equipment financing to hedge against rising prices and should for the following reasons.
Waiting the market out to buy needed equipment and machines can wind up being very costly for your company. Raw material prices are at an all time high, and while some are hoping to see prices stabilize soon, the earliest prediction is summer of 2022. Of course, this is just an estimate, and it could be a lot later that we start to see prices level out.
This rise in prices can be felt throughout the supply chain and at construction sites as a whole. Waiting even just a month to buy the new equipment or machinery that your company needs could prove detrimental. By locking in a fixed-rate now with construction equipment financing, you can protect yourself from having to pay more in the future while still getting the machines you need today.
One reason why prices are rising so high is because the demand is there! There is extremely strong demand in the construction sector for new projects and builds. If you are holding off on getting new or used equipment, your competition is not.
To stay competitive and relevant in this growing market, it is important to take on as many jobs as you are able to and not leave them to your competitors. So how many jobs can you take on? It depends on how many machines you have. You can increase how many equipment pieces you have, increasing the number of jobs you take and increasing your profits. These profits can be used to better safeguard your company against rising prices and any other challenges that the rest of the year may bring.
Buying new or used equipment in total with cash gets extremely expensive. Not to mention, then your working capital is depleted for other expenses. You can better manage your cash flow by utilizing construction equipment financing to get the machines you need at a manageable monthly rate. This means that as other prices rise in conjunction, like labor costs or operating expenses, your cash is not tied up in equipment. This cash can then be used to pay off those other expenses and you can support your business.
If you are searching for equipment financing for your company, now is the best time. We would love to go over your options with you and see how equipment financing can benefit your business. You can contact a member of our team whenever you are ready, we are here to help.