In terms of capital, the initial investment in buying a small excavator is high. For example, the price of an ordinary small excavator ranges from tens of thousands to hundreds of thousands, which is a considerable expenditure for SMEs with limited capital, and may bring greater financial pressure on the enterprise, affecting the enterprise’s investment and development in other aspects.
Long capital recovery cycle: It takes a long time to recover the purchase cost through the operation of the equipment. If the business volume is unstable or the project cycle is long, the capital recovery cycle may be longer, during which the equipment may also face the risk of depreciation.
Low initial investment in leasing: Leasing a small excavator requires only a relatively low rental payment, without the need to incur a high one-time purchase cost. For example, the monthly rent may be only a fraction of the purchase price, which is more affordable for SMEs that are short of capital and can ease the financial constraints.
High capital flexibility: Rental payments are more flexible and can be adjusted according to the business situation and project progress of the enterprise. If the enterprise has less business in a certain period of time, it can choose to suspend the lease or reduce the number of leased equipment, thus reducing the rental expenditure.
Second, the use of demand
Purchase
Long-term use of low cost: If the business of the enterprise continues to be stable, the demand for small excavators for a long time, the purchase of equipment in the long-term use of more economical. With the growth of the use of time, the depreciation cost of the purchase of equipment will gradually reduce, while the rental costs may remain unchanged or continue to accumulate.
Can be used at any time: After purchase, it can be used at any time according to the enterprise’s production plan, not subject to the restrictions of the lease period and the leasing company. For some sudden projects or urgent tasks, the enterprise can put them into use immediately to improve production efficiency.
Leasing
Short-term use is more cost-effective: for some small and medium-sized enterprises with unstable business volume and short project cycle, leasing small excavators is more appropriate. For example, some enterprises only have earthwork demand in specific seasons, the purchase of equipment may cause idle waste in the off-season, while leasing can be flexibly rented according to the actual demand, to avoid the loss of idle equipment.
Fast equipment update: With the continuous development of science and technology, the technology of small excavator is also constantly updated. Leasing can make it easier for enterprises to use new equipment, to maintain the advancement and competitiveness of the equipment. While buying equipment may face the risk of being eliminated in a short period of time due to outdated technology.
Third, the maintenance cost
Purchase
High maintenance cost: after purchasing the small excavator, the enterprise needs to bear all the costs of equipment maintenance, repair, replacement of parts and other costs. These costs are increasing with the increase in the service life of the equipment, which requires enterprises to invest a certain amount of human, material and financial resources for management. If the equipment fails, it may affect the normal production of the enterprise, resulting in greater economic losses.
High professional and technical requirements: enterprises need to be equipped with professional maintenance personnel or co-operation with external maintenance service agencies, which puts forward high requirements on the technical level and management ability of enterprises. If the enterprise lacks relevant technical personnel and management experience, it may lead to improper maintenance of the equipment and shorten the service life of the equipment.
Leasing
Low maintenance cost: the leasing company is usually responsible for the daily maintenance and upkeep of the equipment, and the enterprise only needs to bear some small wear and tear costs. If the equipment fails, the leasing company will repair or replace the equipment in a timely manner, reducing the worries of the enterprise. This can reduce the maintenance costs and management difficulties, so that enterprises are more focused on the development of core business.
Professional maintenance guarantee: the leasing company has a professional maintenance team and rich maintenance experience, which can better ensure the normal operation of the equipment. They will develop a reasonable maintenance plan according to the use of equipment, timely detection and resolution of potential problems to ensure the reliability and stability of the equipment.
In summary, for small and medium-sized enterprises in developing countries, leasing small excavators is more suitable for short-term, temporary, cash-strapped and want to reduce maintenance costs and risks of the project; purchase is suitable for long-term, stable business, relatively well-funded and have a long-term holding and use of the equipment planning.
Translated with DeepL.com (free version)
