Rent, Lease, or Buy
By Cleanfax staff
Sometimes a company finds itself ready to venture out into new services that require new equipment but aren’t quite ready to make a big investment in something that simply might not pan out. Other times companies are in need of certain equipment for a brief time and then will never or rarely need it again. In these times, renting might be the best equipment acquisition option.
But what key considerations should industry companies take into account when deciding whether to rent, lease, or buy new equipment? We sat down with Sunbelt Rentals Director of Flooring Solutions Adam Camhi to learn how to make the decision.
Cleanfax: When it comes to equipment acquisition, what is the difference between renting and leasing within the restoration and cleaning industry?
Adam Camhi: The landscape for when it is best to rent versus lease is becoming more site specific. If an organization is equipped to manage the total cost of ownership—including preventative and routine maintenance and unexpected service needs coupled with the downtime—then lease options make sense.
On the other hand, a rental program can be more beneficial if equipment is deemed essential 24/7/365, since quick service or critical replacement can happen. Renting is also best when equipment is needed sporadically for project work or if factors are uncertain, such as when operating on a contract in which the scope of work might suddenly change.
A couple of additional key differences between renting and leasing include:
- Lease: Long term, 36-60-month lease terms
- Rent: Short-term or long-term options, tied to equipment only when needed
- Lease: Included in budget as a capital expense
- Rent: Pulled from operating costs.
CF: In which circumstances is it more feasible to rent or lease than buy?
AC: There are numerous examples where rental options prove to be beneficial, such as when capital restrictions exist or markets are uncertain.
Rental options are also an asset to any cleaning or restoration business planning to grow since you can immediately scale your fleet up and down to match business demand. This can be particularly beneficial in the restoration industry, as natural disasters add a high level of unpredictability to service demand.
One of the primary drivers of deciding whether to rent or buy is around product utilization. If the equipment you need will only be used sporadically or you are doing seasonal or temporary work, rental is a great option to keep overhead costs low, reduce maintenance costs, and eliminate the need for equipment storage.
In addition, if a customer is looking to explore new service offerings or wants to try new technology for emerging needs (like air sanitization), rental also offers a more viable option than buying. It provides the flexibility to utilize new equipment without the commitment, allowing users time to decide if it is worth the investment.
CF: Which industry equipment is rented/leased most often?
AC: Historically, we have focused on the floors at facilities. Some of our most popular equipment includes mechanized sweepers and scrubbers for hard surfaces and vacuums and extractors for soft surfaces.
However, with the pandemic, we have seen a surge in the need for the full deep cleaning of facilities with an emphasis on high-touch areas. This has led to an increased demand for electrostatic sprayers, touchless cleaning systems, indoor air quality equipment and autonomous cleaning equipment.
CF: Have you seen an uptick in rentals of equipment that has been unavailable during the pandemic?
AC: We have seen rental demands increase during this pandemic, including a surge in longer term rentals on lower cost items—such as electrostatic sprayers. This demand has been stimulated by the heightened awareness of cleaning, sanitizing, and disinfecting matched with market uncertainty. Given our supplier network and quick action, we were able to amass a large fleet of electrostatic sprayers and other equipment in low supply during these unprecedented times.