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Creative Financing in the World of Municipal Contracting

Posted by Olivia Singer on May 14, 2020

Municipal wastewater contractors rely on their ability to complete jobs in an efficient and timely manner to make money—paid by the project and not by the hour. But striking a balance between increasing productivity and keeping within a budget can be difficult. While searching for ways to take on bigger projects and work more productively, contractors are often forced to get creative with their financial decisions.

Lease and Rental Options for Sewer Contractors

One of the key tools to advancing in the world of municipal contracting, especially in trying economic times, is utilizing rent or lease options to acquire top of the line equipment without exceeding set means. 

Renting or leasing equipment gives contractors the ability to try out the best equipment for the job, without having to deplete capital. The broader the inventory of equipment a contractor can deploy for service work, regardless of whether it’s owned, rented or leased, the more types of projects they can bid on. And utilizing the newest technology gives them a competitive edge. 

Try Before You Buy

Renting can also be preferable to contractors who are presented with a one-off opportunity that may require a specific kind of equipment, but one that’s not likely to come up frequently enough to make a lease or purchase commitment. Other times, a contractor may possess a certain piece of equipment, but renting a second, or even third, one can allow the crews to do more at one time.

And money spent renting equipment isn’t necessarily a sunk cost if a contractor ultimately decides to purchase it. Some equipment manufacturers offer rent-to-own options, with a portion—or all—of the money spent on rent applied toward the purchase price. 

While there are many benefits to purchasing new equipment, there’s no denying the fact that it’s a big investment. Beyond large initial upfront costs, there are associated operating and ownership costs for things like service, maintenance, interest payments and storage. 

Envirosight: Rent, Lease or Buy

Preserving Capital

Renting and leasing takes away some of the costs and long-term commitments associated with outright purchase. Leasing equipment also allows contractors to preserve capital. Contractors have the ability to use the equipment desired with less capital expenditure than is required to purchase it. For new contractors, or those looking to quickly drive their company’s growth, leasing helps minimize financial overhead and allows for better planning of monthly expenses. There may also be tax incentives private for-profit companies can take advantage of when leasing equipment. 

Business Incentives

Many equipment manufacturers also offer incentive programs for municipal leasing, including benefits like delay of the first payment for one full budget year, lower payments for the first 1-2 years, or conversion of short-term financing (3-5 years) to longer term financing (6-7 years). Before making any decisions, it’s important to seek out the funding options available on the equipment under consideration. 

The first step in deciding if renting or leasing is a more suitable option than purchasing outright is conducting a cost-benefit analysis and considering a series of questions. How soon do I need this equipment? How often will this equipment be used? What kind of projects will this equipment be used for? Do I need other equipment to use it? Is my crew trained to properly run this equipment? How does this fit into my long-term versus short-term budget?

Increased Flexibility

For a contractor in need of the equipment quickly, but one who hasn’t had the opportunity to demo it or research price comparisons, renting provides a quick fix without having to surrender the job opportunity or commit long-term to the equipment. Generally, renting or leasing gives contractors the flexibility to take time with their decisions, while still boosting their overall capability, and in some cases can ultimately help save money.

Equipment shouldn’t stand in the way of a municipal contractor looking to expand its potential or increase efficiency on the job. There’s a list of options to help get the preferred equipment in a contracting crew’s fleet, without fears of exceeding budgets, depleting capital or committing to the wrong purchase decision. 

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Topics: Sewer Inspections Resources

About Envirosight

Envirosight provides video pipeline inspection solutions to municipalities, contractors, departments of transportation, and civil/environmental engineers. Envirosight is committed to ongoing innovation, delivering products that enhance user productivity and inspection detail. Envirosight serves customers through a trained network of regional sales partners who deliver localized support and expertise with rapid turnaround. 


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