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So how are you going to finance your waste compactor and recycling equipment? Purchase or Lease?

Consider this quotation from the famous American industrialist and one-time richest man in the world, John Paul Getty:

"Buy what appreciates, lease what depreciates."

Houses, art, land and stocks and shares are typical examples of assets that appreciate. OK, they can all go down in price from time to time but the point is they generally rise in value. Motor cars, machinery and IT equipment all go down in value over time as they are used.

Why tie up your cash in a depreciating asset?

If you pay cash for waste compactor, you own it but you no longer have the cash. What's more, the value of what you bought is dropping, from the moment you take delivery. Add to that the fact that you can only take 25% of the value as a cost each year when it has made a 100% dent in your cash flow. As all good businessmen know, even the best businesses fail when they run out of cash.

And who is to say that your new equipment won't be out of date technology in three or four years time? Trying to sell obsolete technology on the second hand market to get some of your money back is a fool's game. Ask yourself: why do all airlines lease aeroplanes? Because the outlay in cash is prohibitive and there's new technology around the corner every year.

On the other hand, if you lease your equipment you are only paying for the use of it over the time you lease it: you've paid a month's rental and you've used it for a month! You keep most of your cash for purchases of assets which appreciate rather than sinking it all into an asset which depreciates.

Here are the key reasons most savvy people choose to lease rather than buy:

  • Purchasing power: lease finance allows you to get a higher specification or market-leading model for only a few pounds more a week
  • Conserving cash: Lease finance allows you to pay for something as you use it instead of completely, 100% upfront before you use it, keeping your cash for appreciating assets and valuable cashflow.
  • 100% Finance: it is very rare for a deposit to be asked for, unlike bank finance where the bank expects a downpayment.
  • Flexibility of repayment term: you can choose to lease over 2, 3, 4, 5 and up to 7 years to match your operating requirements.
  • Tax: 100% of the cost of a lease is taken as an overhead (and therefore an expense before tax): a purchase only allows you to take 25% of the value each year as a cost to offset against tax.
  • Ability to upgrade technology: at the end of the term you can often continue to pay the same monthly or quarterly cost for the latest model without being saddled with an outdated piece of kit you can't sell on.

Leasing does require you to have a trading history and a decent credit rating however, as you are expected to be able to afford the payments over the term, so start-ups will struggle to obtain lease finance. Even if you have only been trading for a short time however, Bergmann Direct can usually set you up with some sort of facility for your recycling equipment although we cannot guarantee it.

Hopefully we've been able to convince you that leasing is the best option for you. Give us a call and in our quotation we will include weekly, or monthly payments over terms of three or five years.

We look forward to hearing from you.

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    Finance Options
    How will you pay for your recycling machinery? Cash? Lease?
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    Landfill Tax
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    This is a tax on the disposal of waste to landfill.

  • Supplying waste handling equipment & services
    to private companies & public sector organisations

    Bergmann Direct supply a full range of vertical, semi-automatic horizontal waste balers and fully automatic horizontal balers.

    Our waste balers can handle all the standard materials such as cardboard, soft plastics (shrink-wrap, plastic sheeting), PET bottles, hard plastics, aluminium and steel cans even difficult materials such as RDF which require plastic strapping and wrapping to be compliant.

    Bergmann Direct supply a range of vertical balers. for cardboard, plastic and metal cans. Mill-size balers are ideal for low to medium volumes (0.3 – 1 tonne per hour) of cardboard, soft plastics, PET bottles*, aluminium and steel cans. UK paper mills require ‘mill-size’ bales in order to attract rebates on cardboard. Manually loaded and tied off. Bale pressure up to 50 tonnes. View the Vertical Baler range here.

    Semi - Automatic (Manual Tie) horizontal waste balers.are ideal for larger volumes (1 to 3 tonnes per hour) of cardboard, plastics, PET bottles*, aluminium and steel cans,  where volume loading is required from a bin lifter, bucket, forklift truck or a conveyor. All bales are ‘mill-sized’. The bales are tied off by hand and the bale is fully-ejected before another bale or another material is started. Bale pressure from 80 to 120 tonnes.

    The fully - automatic (auto-tie) horizontal waste balers.is required when volume processing 3 to 16 tonnes per hour. Bales are automatically tied off and pushed out (the bale behind pushes out the bale in front). Feeding is typically by bucket, forklift truck, conveyor or chute. All bales are ‘mill-sized’. Bale pressure from 40 to 120 tonnes.

    RDF is a difficult material which is often made up of small particles of residual waste after the main items have been outsorted. It requires a) high pressure; b) plastic ties and c) bale wrapping. You need a plastic tie facility on your baler which RDF balers.use and you will need a bale wrapper aswell. Feeding is typically by conveyor.