Pinterest Email In essence, the equipment for hire business involves two parties: These machineries are very costly and they are usually used only once and only for a short period of time. To be practical, instead of purchasing, most businesses turn to equipment leasing companies to solve their heavy equipment requirements.
It may not necessarily increase your income but you can be rest assured of significant savings which can be invested in other aspects of business. In this write up, you will learn the basics of equipment leasing and have the conviction that it could sponsor your business. What is Equipment Leasing?
Equipment leasing is an agreement in which a business firm rents the equipments needed for its activities for a specified period of time and at a specified cost. At the end of the specified period, the lessee business may decide to buy the equipment rented at its market value or equipment leasing business plan in nigeria any agreed amountextend the period or return it to the owner.
The main benefit here is that there is significant cost savings compared to buying the equipment. This serves as an alternative to cash strapped businesses. It also aids entrepreneurs who have the plans to bootstrap their way to business success.
It is capital intensive: The business is in existence because not everybody can afford to own all equipments needed for their business. The reason why clients will hire equipments is because of the high cost of purchasing them which is what will keep you in business.
The equipments you have are the essence of the business hence, take good care of them. It is important to maintain as at when required to avoid breakdown. If this is not done, your equipment may be badly operated and damaged Types of Equipment Leases There are two types of equipment leasing arrangement which are: Operating Leases This is also known as service leases which procure for both financing and maintenance.
The owner is responsible for protecting the equipment as the lessee uses it. The cost of sustaining the equipment is usually worked into the rental price to be paid. Office copiers, trucks, medical diagnostic equipment, computers and automobiles are examples of equipment categorized under operating leases.
Financial leases This is also known as capital leases and is markedly different from operating leases as they do not provide for sustenance and cannot be cancelled.
They are commonly in place for a period equal to the useful life of the equipment.
This is also known as service leases which procure for both financing and maintenance. This because under the same business, there may be widely different needs of customers as a bike rental downtown will have various customers than one by the beach, and they will totally have different needs.
The best way to go about this is to interact with the potential customers Write a business plan A business plan is very much needed before going to this business most especially if you intend borrowing. Having a well researched and viable plan makes you have access to loans from financial institutions like banks.
A typical business starts with an executive summary which will include the structures and the core values of your business. It should also include the items you intend to lease and a market evaluation which will state the target market for your business.
It should also have summary of how your plans would be implemented and a strategy for the functioning of the business. A management summary is also expected. Useful samples of business plans can be found online Investigate the costs.
This type of business requires a high start-up capital.The leasing business in Africa is a promising opportunity with strong prospects on the continent. I have a friend who owns a small but successful construction company. We the leading alternative financial solutions providers in Nigeria as we continue to set the pace in the alternative and structured finance industry.
Trade Finance. Trade Finance Leases (Finance and Operating) Venture Capital Investment Business Loans. Learn More. Co-investment. Stable Returns Target Investment Plan. Equipment Leasing Association of Nigeria (ELAN) was established to primarily promote the business of equipment leasing in Nigeria through its quantitative lease training and advisory programmes.
Earth Moving Equipment Sales And Hiring In Lagos / Equipment Leasing: Dry-cleaning And Laundry Items / Equipment Leasing / Renting (construction) (1) (Reply) (Go Down) BUSSINESS PLAN FOR THE PROCUREMENT AND RUNNING A HIRE SERVICE.
The construction business in Nigeria is a Multi billion dollar industry with hardly any year falling short of expected windfalls befalling successful contractors who bid for construction projects, the last 5 years has witnessed increasing patronage and profits for most construction companies in Nigeria.
Kola is an expert in equipment and vehicle leasing having worked with the best leasing companies in over five states in Nigeria. He has cumulative experience in the financial industry cutting across Leasing, finance management, corporate finance, financial advisory, capital raising, portfolio management, financial modelling and research as well as relationship management.