Financial Solutions

Once the correct specifications have been determined for the material handling equipment in the fleet, the important decision of how to finance the acquisition must be decided. Very few fleet acquisitions greater than $15,000 are cash sales. Rather, fleets can be financed with some type of financial arrangement.

Existing line(s) of credit can be used. As an alternative, however, outside financing often is a better alternative, particularly if ownership of the material handling equipment is not desired. The use of outside sources also preserves credit lines for other targeted capital expenditures. Once the decision is made to finance the material handling equipment, it is important to match the term of the finance agreement with the economic life.

If the term is too long, the material handling equipment will reach a point where it should be taken out of service. However, there still will be obligations for additional payments, or a payoff to the leasing source for an early termination.

The primary decision is whether to own or not to own the material handling equipment at the end of the term. There are certain characteristics with each option:

Finance Lease for Material Handling Equipment:

For the customer who wants immediate ownership of the material handling equipment, but wants to pay for the equipment over an extended period of time.

• Tax benefits of depreciation deductions
• Conserves capital
• Conserves customer’s line(s) of credit
• Level payments for budgeting purposes
• May establish a predetermined “balloon” payment at lease-end
• Light usage of equipment
• Conditional sales contract, easier early pay-off

Operating Lease:

For the customer who wants the lowest monthly payment and intends to return the material handling equipment at lease-end.

• Lowest monthly payments
• Off balance sheet financing, not considered customer’s asset, ability to write-off entire payment for tax purposes
• Conserve cash and lines of credit
• Ability for the customer to write-off entire monthly payment
• Level payments for budgeting purposes
• Efficient use of equipment, lease structure to match the economic life of the customer’s specific application
• Capital appropriations not available

If material handling equipment is required, but a commitment for either a finance lease or operating lease cannot be made, two alternatives are available.

A delayed billing is designed to help a company through a fiscal budget term of a maximum of twelve months. One hundred percent of the payments are applied to reduce the established acquisition cost less maintenance performed by Wisconsin Lift Truck and one percent (1.0%) interest on the remaining balance. Below are features of the delayed billing option:

Delayed Billing:

Customer wants to own material handling equipment but cannot allocate capital expenditures in the next six to twelve months.

• Customer certain of ownership but cannot allocate capital expenses at present
• Percentage of payments applies to purchase of equipment as opposed to short-term rental
• Customer commits to a purchase at the end of the delayed billing period
• Program structured to apply monies to permit purchase within a maximum of twelve months, a typical budget period

The second alternative and most flexible is our short-term rental fleet.  

Short Term Rental:

For the customer who has short-term material handling needs.

• Need of material handling equipment one year or less
• Possible change in equipment requirements in future
• Need of equipment for a specific short-term project
• Short-term seasonal need for equipment
• Capital appropriations not available (delayed billing option)

Fleet Services offers help in structuring the optimum material handling equipment acquisition starting with an application survey of your operation. We then tailor a financial package to match your application and cash flow requirements.  Contact us to schedule an application survey today!