A guide to leasing Forklifts
The market for forklift trucks continues to grow in line with significant demand, at least according to the British Industrial Truck Association (BITA).
Image by JOSE ARROYO from Pixabay
This body has revealed that the volumes of forklift trucks sold across the UK increased 2.5% through 2018, peaking at just over 35,000 units in the process. This wider demand is driven by the critical role that forklifts play in modern warehouse spaces, particularly in terms of safety and optimising productivity when picking, packing and organizing goods. Of course, the procurement of forklift trucks represent an example of capital expenditure, and some businesses may find that leasing offers a more viable option.
We'll explore this below, while considering its benefits and how you can get started!
What are the Benefits of Using Forklift Trucks?
Prior to the introduction of forklift trucks, warehouses relied on manual labor when lifting, carrying and sorting heavy duty items. This put employees at a greater risk of incurring back and muscle injuries, while also impacting negatively on efficiency and productivity by reducing manoeuvrability and load capacity. Forklift trucks have resolved both of these issues, by making it much safer to pick, pack and internally transport heavy duty goods while simultaneously improving the speed, scale and efficiency of internal shipping processes.
Arguably, the introduction of specific lanes and routes for forklift trucks has further improved warehouse safety, while leading to the creation of more organized spaces with a much more efficient level of operation.
Can You Lease Forklift Trucks - And What are the Benefits of This?
Of course, not all forklift trucks have been created equal, particularly in terms of their size or capacity. This also causes issues in terms of price, with the UK market including vehicles ranging from just GBP3,500 to in excess of GBP30,000. While vehicles in the latter range represent a huge capital expenditure, these also tend to be of higher quality and more likely to deliver a return on investment.
Conversely, cheaper models may have a shorter lifespan and be more likely to break down over time, incurring significant maintenance and upgrade costs more regularly. The good news is that leasing offers a viable alternative in the current marketplace, as this enables you to minimise your initial capital expenditure and unlocks several benefits overall. These include:
- #1. Initial Cost Savings: The initial cost savings associated with leasing can be huge, depending in part on the cash value of the forklift truck (or trucks) that you bring onboard.
Some lease agreements even enable you to pay nothing at the time of the agreement, while the monthly lease commitment is often lower than alternative loan repayments. This type of agreement typically has less impact on your books due to reduced interest rates when compared with buying or financing.
- #2. Ease of Maintenance and More Efficient Upgrading: Usually, your lease agreement will also reveal a committed relationship between you and your supplier, making provisions for scheduled and long-term maintenance.
This makes it much easier and more affordable to repair damaged equipment, while enabling you to simply turn in your vehicle at the end of a five-year lease and upgrade to a new, potentially improved unit. This is highly cost-effective, while it enables you to remain competitive with the best and most advanced equipment.
- #3. More Predictable Long-term Costs and Financial Management: If your agreement does make provision for scheduled or unscheduled maintenance from a supplier, you should find it a little easier to make financial forecasts and predict long-term costs.
Similarly, anyone who has ever tried to resell an old or outdated forklift truck will know how difficult this is, while leasing negates this issue by negating the risk of asset depreciation and making financial management a little easier.
- #4. Keep the Bank Lines Open: Working capital lines of credit are crucial to businesses (especially in the current economy), so choosing to lease forklift trucks creates valuable bank lines that may drive further expansion within your business over time. For example, committed and fruitful lease relationships may also enable you to take on other types of commercial equipment over time, unlocking additional revenue streams in the process.
The Last Word
As we can see, leasing is a viable and often preferable option when securing forklift trucks with your preferred supplier, especially as many vehicles represent a huge capital investment and will depreciate markedly in value in a relatively short period of time.
By partnering with funders like GRENKE, however, you can immediately minimize the upfront cost of bringing forklift trucks onboard, while sidestepping the risk of asset depreciation and accessing flexible lease terms that suit your business's circumstances and payment cycles.
Over time, your relationship with GRENKE will also unlock access to other commercial equipment, which may prove crucial as your business grows and looks to expand.
Browse the GRENKE website to see precisely how the company can help you, or get in touch with them to discuss your precise requirements in a little more detail!