With the economic roadmap being handed down in the federal budget the emphasis is on civil and large scale government works. The question for many contracting companies is that whilst winning contracts is great, the machinery required can be expensive and in a large number of major projects breakdowns can cost a huge amount to the bottom line in clawbacks for downtime. We have recently seen contracts that involve large earthmoving equipment to be on site and running for substantial times, In this case a new piece of machinery is the correct way forward, to save in repairs and breakdown costs.
What if the contract is for 3 years and stipulates new equipment on site every year? A rental option with tax benefits could be the way forward, taken over 12 months with the ability to return to the lender. We have seen success recently with this and the lends can all be done with a few pieces of documentation. If you are one of the companies lucky enough to win these construction jobs, have a look at the equipment required and the options available, it could be the best way of managing your assets over the life of the contract. If you are interested in discussing these options, please feel free to contact us.