Exploring the Benefits of Bus Financing
In tough economic times, contractors have to get creative with their financing: affordable lease and lease-purchase options.
Financing Your Bus Fleet
Financing is a potential solution for those with a limited budget for today’s bus acquisition needs.
Despite limited budgets, keeping a a steady fleet age is often dependent on a rotating fleet. Financing permits organizations to manage their resources better, letting contractors’ school districts get what they need rather than what their actual budget allows.
You can pay over the useful life of the bus to better budget your money. School bus operations can alleviate various repair and maintenance costs by maintaining a younger fleet.
Benefits of Fleet Leasing for Contractors
A lease enables customers to enter a predetermined period and make their rental payments during this time. The person returns the vehicle to the bus dealer or the financial institution after the agreement ends, a structure called “walk away.” The customer can choose a term, rate, and payment amount that is pre-negotiated with a lease-purchase option. At the end of the term, the person owns the bus. Lower taxable income is a potential benefit with this option due to being able to take the depreciation benefit.
We recommend using bus financing alternatives when they are available. A line of credit at a bank is not as effective – free up your working capital lines for all your other needs.
Flexible Financing Structures
The term can range from three to 10 years, with the average being five years for leasing or lease-purchasing.
You can usually customize the different financing structures to meet your bus fleet needs, and some possibilities include skip payments, delayed first payment, no down payment, balloon payments, and escrow funding.
Some possible financing scenarios may include dealers running specials, like distributors working with lenders to buy down the lease rate and grace periods.
Customers can enhance their cash flow in a variety of ways. People who add equipment such as retractable ramps, security cameras, or an A/C system to a bus that is already financed can refinance the cost of the improvement into the current lease payment. Another possibility is for customers to take advantage of the equity in their new bus fleets with an equity loan.
Learn more about the financing options available. This ensures you make the right decision.
It is critical to be informed about the tools available to you through financing. Contact Colorado West Equipment! We are a reliable resource to help you with any financial questions you might have. We can help customers find the money necessary to acquire needed buses.