Warehouse equipment financing can be a real problem solver for a growing business.
Because the when you’re increasing inventory and trying to reduce labor costs you need to make meaningful changes in 2 areas:
- The way your warehouse is organized. That means new pallet racks, drive-in racks and mezzanines
- Equipment you use to pick, pull orders and rack incoming inventory.
And equipment financing or leasing can make those upgrades cost effective and quickly accomplished.
Kinds of equipment financing available
Most people use the terms financing and leasing interchangeably. And while they do both describe ways to purchase equipment on a payment plan, there are some fundamental differences too.
Leasing warehouse racking and equipment
Fundamentally, when you use an equipment leasing service you’re paying for its use over a period of time.
When you lease a forklift, for example, you might make payments for 36 to 72 months and not own the vehicle at the end of the term. So in one sense you’re never really contributing toward ownership of the forklift.
At the end of the lease you often have either the option OR the obligation to purchase it for the remaining value.
One big advantage to leasing is that the monthly payment is typically much lower than a financed purchase.
Companies choose equipment leasing programs for your warehousing equipment upgrades because of lower payments, or if you expect technological advances to make the next model more attractive.
There are different types of leases available, but all share these basic terms.
Financing warehouse equipment
Financing is a more commonly chosen option for SMEs or bigger businesses for the following reasons:
- Long term strategy: Owning the equipment after the finance term often gives them years of use for no further cost other than maintenance.
- Customization: Financing allows the buyer to customize for their individual needs. That can make a big difference in the efficiency of a conveyor system, mezzanine or other storage equipment.
- Long-term cost savings: Since financing usually offers better interest rates than leasing it can lead to big cost savings in the end.
- Tax benefits: Depending on the tax laws in their jurisdiction, SMEs may be able to take advantage of tax benefits when financing equipment, such as depreciation deductions.
- Credit availability: Some SMEs may find it easier to obtain financing for equipment purchases than to qualify for lease agreements, particularly if they have a strong credit history and cash flow.
What EXACTLY Can you Finance?
Warehouse storage is usually overlooked by most companies when looking into financing. But rest assured, all of the following and more can be added to a business loan:
Type of Storage Solution
Description
A type of drawer system used for storing small items like tools or parts. Modular drawers can be configured in different sizes and layouts to fit specific needs.
Vertical Lift Modules
Automated storage and retrieval systems that use vertical carousels or lifts to store and retrieve items. Vertical lift modules can be useful for high-density storage or for items that need to be accessed frequently.
And here are a few examples of what types of equipment can be financed:
Type of Storage Solution
Description
Forklifts
Motorized vehicles with pronged platforms used to lift and move heavy loads within a warehouse or manufacturing facility. Can be leased to help businesses manage the upfront cost of purchasing a forklift outright.
Conveyor systems
Automated systems used to move materials or products from one area to another within a warehouse or manufacturing facility. Can be leased for short-term needs or when upgrading or expanding existing systems.
Automated storage and retrieval systems
Computer-controlled systems that automatically move materials or products within a warehouse or manufacturing facility. Can be leased to help businesses manage the upfront cost of purchasing a significant investment outright.
Pallet jacks
Hand-operated or electric vehicles used to move pallets or other heavy loads within a warehouse or manufacturing facility. Can be leased for short-term needs or when testing new equipment.
Dock equipment
Equipment used to load or unload goods from trucks or other vehicles at a warehouse or manufacturing facility. Can include dock levelers, dock seals, loading dock plates, and other equipment. Can be leased to upgrade existing equipment or for temporary space operations.
Deals and Rates for Leasing or financing for the warehouse industry
Partnering with Adia Capital has some real advantage for the warehouse industry.
First, financing with us is a much faster process than going through a bank. We can have approvals in as little as 24 hours. Traditional banks typically take much longer.
Quick financing or leasing equipment can mean taking advantage of Section 179 tax savings for the CURRENT calendar year.
Next, Adia Capital has a network of banks and other financial institutions standing by to review warehouse industry lease and finance applications. We will shop your company’s application to get the best interest rates and terms available.
Traditional lenders don’t have that flexibility.
The team here at Adia also has the expertise in financing and the warehouse industry to help guide you through the entire process.
Warehousing companies of any size can take advantage of equipment leasing for a wide range of equipment. Everything from pallet jacks, forklifts, reachlifts, shelving and racking systems to forklifts and conveyors can be financed with us!
