Cat^® Rental Fleets: Remain Nimble
in Uncertain Times

COST-SAVING STRATEGIES FOR AN UNCERTAIN ECONOMY

During an economic slowdown, small contractors can struggle with the delicate balance between acquiring equipment and maintaining positive cash flow. It can be risky to tie up capital in major purchases when projects are few and far between. But you still need access to machines, attachments and other work tools to complete — and compete for — the jobs that do exist.

Flexibility is key to achieving that balance, and that’s where a construction rental fleet comes into play. Adding to your rental fleet allows you to acquire equipment on an as-needed basis without taking on more debt and keeping monthly payments low. And financing machine rentals can make payment schedules more manageable during uncertain times.

TOP FOUR BENEFITS OF RENTING DURING A FINANCIAL SLOWDOWN

1. Less capital up front means more predictable budgeting
   
   During a financial slowdown, your business may not have the cash on hand to buy new equipment, work tools or attachments. Or you may want to save your dollars for other priorities, like maintaining payroll or paying down existing debt.

   Renting requires less of an upfront financial investment than purchasing equipment. You only pay for the time you need — a day, week, month or longer. It’s a predictable cost you can add into your budget. If work slows, you can return the rental and eliminate that expense right away. If work picks up, you can extend the rental or, in some cases, convert it into a purchase.

2. No maintenance, repair or storage expenses
   
   When business is slow, every dollar counts. You want your team to focus on the tasks that make you money.

   With most rental agreements, you don’t need to worry about the costs (or time) associated with maintaining, repairing, storing or insuring equipment. And you’re not responsible for depreciation, either. That can be critical during a downturn, when equipment resale value tends to drop.

3. Opportunity to build a competitive advantage
   
   An economic slowdown means fewer projects, which results in more competition for every job. Why should a potential client choose you over other contractors? If you can prove you do high-quality work — and do it more efficiently than your competitors — you may be able to win more bids.

   Rentals give you access to newer equipment models that can deliver a competitive advantage for your business. They're typically more fuel efficient, which may lead to lower operating costs. They generally offer more operator comfort features, which can help your team work productively all shift. And most come equipped with the latest onboard technology — like grade control, on-the-go payload weighing and automated controls — which can help you get jobs done faster.

4. Expanded business opportunities
   
   Economic downturns don’t hit all industries or regions equally. Maybe there’s less construction happening in your community, but you see chances to pick up jobs in other areas. Or maybe there’s work available in industries less affected by a financial slowdown than construction.

   Adding to your rental fleet can give you the versatility to jump on these opportunities without making a significant financial commitment. You can rent the equipment or attachments you need — exactly where and when you need it — to take on new and different types of projects. That includes not just machines but attachments and other work tools as well.

RENT WITH THE CAT^® CARD FOR EVEN MORE ADVANTAGES

When you rent equipment and other gear from your Cat dealer or The Cat Rental Store, you have the option to pay with the Cat Card. This flexible, unsecured line of credit lets you build a pay history with Cat Financial. Renting with the Cat Card reduces the need for upfront capital and simplifies budgeting because you’ll be able to anticipate costs each month. 

Using the Cat Card to finance your machine rentals means you can get the equipment you need right away. Plus, Cat Card accountholders can earn Cat Vantage Points on every qualifying rental.* (*See cat.com/catcardrewards for eligibility, details, and terms and conditions.) You can redeem those points for Cat Credits and put them toward your next rental or parts and services purchase from your Cat dealer or on parts.cat.com.

WHAT ABOUT FINANCING EQUIPMENT DURING A SLOWDOWN?

There are plenty of reasons to rent equipment in an uncertain economy. But depending on your financial situation, heavy equipment financing with loans and leases may also be advantageous.

You can take out an equipment loan to retain the benefits of ownership, including potential tax advantages. A finance lease can lower your monthly payment and include the option to purchase equipment at lease-end. Or you can choose an operating lease for the lowest monthly expense. This comparison guide shows the differences between loans, leases and rentals side by side.

Also, keep an eye out for special financing offers. You could save money by taking advantage of competitive rates versus waiting to buy or lease until the economy stabilizes.

PREPARE FOR THE UNEXPECTED WITH CAT FINANCIAL

Rather than worrying about the next economic slowdown, it’s good business to be prepared. One simple step you can take today is learning more about Cat Card offers. You can complete the online credit application anytime with any device — it typically only takes 5-7 minutes.