Many companies across most major cities such as Singapore have a difficult time considering whether to rent or buy a forklift. They always have to ponder what to do and how much to weigh.
The decision making is not so obvious and straightforward, given the many options for forklift around. It all depends on many factors of forklift usage, such as the frequency and the cost.
What is forklift rental
Forklift rental, in the purest sense, is about taking up, or borrowing, a forklift for a specific duration before the renter returns. There is no property ownership involved in the process when it comes to renting a forklift.
The duration of rental can last from short periods of time like about a month or 2 to extended periods of time, such as many years. In Singapore for example, many forklift companies such as Red Forklifts offer rental services to help companies.
What are the benefits of forklift rental
Many benefits do arise from renting a forklift. There is a lower upfront cost of renting it, compared to purchasing it. One reason is the maintenance consideration factor.
Forklift rental is cheaper as long as some funds are set aside for the monthly budget. This can be achieved so long as maintenance of the equipment is not needed by the companies. Another benefit of forklift rental is the allowed access to the most updated technology and equipment. This means that renting it is as good as buying it.
Renting a forklift is a shorter term one compared to purchasing one. Apart from savings of cost and effort from maintenance, such as to substitute existing lift trucks that are under repair or servicing, the benefits far outweigh the cost savings.
Companies can expect to meet demand for higher capacity of work that is temporary. The forklift may not be an additional equipment on the list. But if companies face additional workload at times, a forklift can help sort out and clear off the heavier tasks needed. Even an additional manpower may not be able to solve this problem so easily. Forklift rental comes at the good time for this. It helps the companies meet the increases in seasonal demand.
A forklift rental is a temporary solution for companies to retain their productivity. As long as a forklift can be used, they are able to work at the same amount of workload as compared with purchasing one. This saves cost indefinitely for the companies until their budget is fit enough to own one.
This is true. Frankly, not every business or every company is able to spend their funds on a forklift, be it new or used one. It is perfectly understandable as there are many business considerations to note. A forklift rental allows the flexibility of the company budgeting so that more capital can be used in other more urgent aspects of the business first. Cash can be better invested in other opportunities which can produce greater profits for the businesses.
Another advantage of renting a forklift is to try out and test the forklift for its suitability. It gives companies the opportunities to test the forklifts to see which one fits their needs.
Situations where renting is better than buying
Renting a forklift can be better than buying during certain situations. The most crucial situation a business can consider renting one instead of buying is when credit access becomes a concern.
Let’s face it – cashflow may be a concern, especially during economic downturn times. Companies would urgently want to gain access to credit to borrow from financial institutions. As purchasing a forklift is more costly, consider renting one first.
Another situation whereby renting a forklift becomes better than buying is in accounting bookkeeping. Buying a forklift means ownership of the forklift as an asset in the balance books. However, renting it means an operational expense with a rental cost involved. If the rental cost can be used to reduce taxable income, it benefits the company as it is simpler to do accounting work.
During an economic slowdown, generally it would be wiser for companies to save costs. However, the forklift may still be needed as there are still urgent projects to depend on the equipment. You can consider renting the forklift if your business is slower. The machine may be needed seasonally, i.e. during peak periods like a busy shopping Black Friday sale season. You may stop paying for a forklift that isn’t being used by renting it.
Another benefit of cutting the cost of the forklift by renting instead of buying is to avoid cutting manpower costs. Morally and ethically, retrenching your forklift or other staff would be the last resort to cutting costs during an economic downturn. Try to save costs in the forklift as small savings like these go a long way in improving cashflow.
What to consider when renting forklift
To consider when renting a forklift, you may have to do checks with the forklift rental companies. Do a Google search or ask your friends for recommendations on the forklift rental companies available in Singapore. Get quotations from them online and make comparisons.
Apart from online comparisons, as a forklift is a physical product that is a more costly equipment, it is important to ascertain the durability and reliability of it. When visiting the rental company, try to request for a test drive of the forklift equipment. This is the best way to have a sense of how the forklift actually operates.
Another thing to take note is the safety aspects of handling the forklift physically. It is important you still have a staff that has a forklift operating license. Someone must be well trained in forklift in order to be able to operate the forklift safely. Make sure the lights, horn, seat belt and tyres are all intact before renting it.