Running a construction company is serious business! It takes a lot of work to be able to start, maintain, and grow a successful business in the construction industry.
One of the questions we commonly get from readers is whether or not it’s better to lease a crane or rent a crane for their business. Some crane operator's utilize crane finance at their local bank. Like many things in business, there’s no black and white answer.
With as complex as businesses are (especially those in the construction industry), there are many variables and unique situations that can cause one option to be more effective than the other.
So let’s jump right into it and help you figure out whether it’s better to lease a crane or go for a crane rental. Check out these questions and figure out how they apply in your own business or situation.
Why Do You Need a Crane?
It sounds like a pretty simple question, but it’s an important and fundamental question to answer. If you’re looking for answers about whether or not it’s better to get a crane rental or lease, then you probably already know that you need one.
Simply take a minute and make sure that you actually need a crane and that you’re not getting it simply because other businesses have one. If getting a crane is going to help your business acquire or finish a particular job, will help you find more lucrative opportunities, or will lead to higher efficiency rates (and reduce overall total time spent on jobs), then a crane is a great addition.
But answering that alone won’t tell you whether or not it’s best to get a crane rental or lease it out altogether.
How Often Will You Need to Use the Crane?
This is where you’ll start to dig into the true value and cost of the crane to determine whether or not it’s the best option for you. Answering this question will either tell you that you need to get a crane rental, or that a lease might end up being a better option.
For example, if you’re not a construction business owner and just need to take care of some heavy duty projects at home, for your non-construction business, for your neighborhood, or whatever else, a crane rental may actually be a better option.
If the crane isn’t going to get used much overall and you’re only going to be using it in periodic spurts for special projects, crane rental is probably the way to go.
However, if you know that you’ll need to use the crane often, like daily, weekly, or even just monthly for some projects, then leasing a crane might make more sense.
You want to be able to weigh out how much you’re using the crane against the total cost of the crane itself. Even if you plan on “owning” the crane at the end of a lease, it could still be more hassle than it’s worth to lease-to- own a crane.
So in short, if you’re going to use the crane very often - crane finance may be the better option. Whereas if you’re only planning on using the crane periodically for special projects, you’re likely to be financially better off batching your projects and renting out a crane to knock them out together.
Do you have a lot of cash laying around?
Like most businesses, you probably don’t have stacks of cash to just wave around and buy pieces of equipment as you need them. This is why crane rental services and crane leasing companies are so popular to begin with.
Rather than requiring either tens or hundreds of thousands of dollars on the spot, you can divvy up the overall cost of utilizing a crane over a long period of time (crane loans) or segmenting the cost of usage only to when you need the crane (crane rental).
You also want to avoid getting a crane rental if you find yourself constantly renting out a crane. Even if you’re strapped for cash, you’ll end up paying considerably more per year in the long run by sticking with a crane rental than if you were to get a lease. But this only applies if you’re using a crane rental pretty regularly.
What Kind of Crane Will You Get?
Figuring out which crane you’ll get will also help you to make a better financial decision. Of course you need to know how much money you have available to put towards a crane purchase or a crane rental, but knowing how much your crane will cost will directly impact the monthly cost of a rental or a lease.
An option to take into consideration is whether you’re going to seek out used equipment or “brand new.” We typically suggest buying used equipment as long as it’s in good condition. It’s not uncommon for a crane rental to involve a much newer crane, which can simultaneously drive usage cost up, whereas leasing over a long period of time can mean better savings.
Rough terrain cranes can cost a few hundred thousand dollars for a used one and up to a million dollars for new Rough or All terrain cranes.
Do You Want to Keep the Crane?
If you have any interest of actually “owning” a crane in the long term, then a crane rental shouldn’t be consideration. The only reason to consider a crane rental when you know you want to own the heavy equipment in the long run is to “test drive” a crane in certain situations your business will use it.
Otherwise, leasing a crane is the better route to go if you want to own it. In addition, when you choose to lease a crane, you’re also going to get the option to structure your deal in a way that allows you to control where ownership of the crane goes after the lease is over.
You can choose to keep the crane, give it back to the crane leasing company, or upgrade to a different crane. Crane leasing companies can offer you a $1 buy out lease so you own it at the end, FMV buy out lease so you have the option to own at the end, equipment financing agreement so you own the crane the whole time or a TRAC Lease so you have a predetermined buy out at the end but can still decide to just upgrade to a new crane at the end of the lease term.
How Expensive Of A Crane Could I Afford To Lease?
Use our crane finance calculator to calculate how much your crane finance payments could be and see how expensive of a crane you can afford to purchase based on your monthly budget.
So What’s the Verdict? Should I Rent or Utilize a Crane Lease?
Like we mentioned in the beginning, there’s no clear-cut answer for renting vs. crane leasing. Overall it comes down to what you want to do in the long term with the crane.
If you’re planning on using a crane a lot, then you’ll want to use crane leasing, as there is a lot more flexibility and the total cost will be lower than renting a crane many times.
However, if you know that you’re going to use a crane pretty infrequently, then leasing will end up costing you more money than it should. At that point, renting a crane makes more financial sense, especially if you can batch projects together so that you can more use-per- rent out of the crane.
Getting approved for crane leasing options is very quick and easy. Companies like Trust capital can approve a crane operator up to $150,000 with just a simple one page crane finance application. Trust Capital can give a higher purchase amount with more financial information. Lease terms up to 84 months.
Remember, by being a business owner who rents a crane, leases a crane with a FMV buy out or uses a TRAC lease will be able to write off 100% of their monthly payments off their taxable income.
It all starts with an online application or if you're not ready to Apply online for a crane finance Loan we invite you to call Trust Capital and speak with a crane equipment financing specialist that can also take your application over the phone at 866-458-4777. We can give you a no obligation approval that's good for sixty days so you can go shopping for a crane from any crane manufacturer, crane dealer or private party. Trust Capital can finance used cranes from auctions and even finance soft costs such as delivery, taxes and maintenance agreements.