If you need to transport your product via a bulk tank trailer, it is essential to understand the difference between renting and leasing, as you will have different choices depending on which you choose. This article will outline the differences to help decide which one is best for your business needs.
Consider Your Capital Needs
If you are a small business starting and don’t have much cash on hand, you may want to consider leasing a bulk tank trailer. This option is typically even more affordable than renting because it is an operating lease rather than a capital lease. However, if your business starts increasing, you may need to purchase your bulk tank trailer rather than continue leasing it, as there are limits on how long you can keep leasing equipment this way.
Think About Your Long-Term Needs
If you know that you will be transporting your goods via bulk tank trailer regularly, it is likely better to purchase your tank trailer rather than continue to lease one. That way, you can have the flexibility of occasionally taking on additional jobs. Consider, too, that even if your business grows quickly, there is a chance you will have a sudden drop in business and end up with extra money for some time. In this case, it would probably be better to purchase the equipment rather than continue making lease payments on it.
Consider Your Credit
If you don’t have good credit, borrowing money to purchase a bulk tank trailer may be difficult. It can mean that leasing is your only option. However, leasing can be costly in the long run because it is an operating lease. You will want the opportunity to purchase the equipment if you successfully avoid these higher lease payments for as long as possible.
Consider Your Needs for Later Use
If there is no way you will be able to afford to purchase a bulk tank trailer when you first need it or would like the flexibility later on, then leasing is probably your best option. Remember, though, that if you plan to start your own business, you will have to consider the possibility of making a purchase anyway.
Consider Your Self-Employment Tax Liability
If you lease a bulk tank trailer, you don’t have to pay the self-employment tax due on payments made on equipment if classified as capital leases. It can be a bonus to leasing, especially if your business is not profitable right away and you need the money to keep operations afloat.
Consider How Much Space You Have on Your Property
The amount of space you have available for storage may determine whether or not leasing makes sense for your bulk tank trailer needs. If you need to keep it on your property, it may not make sense to rent it as a bulk tank trailer, and you will only be allowed to use the space for storage and not for transporting the product.
Businesses need to know the difference between renting and leasing bulk tank trailers and other equipment. Transport Resources, Inc is your source for bulk tank trailers, whether you need to rent or lease one. They have many different options for you, including single axle and tandem axle, oil field tanks, and chemical tanks.