In recent months, the costs involved in the construction industry have gone up sharply. [1] Some of the prices that are affected include materials like lumber, aluminum and steel. But other costs have gone up, too, for things like labor. This is having a negative impact in many ways. It’s making it harder for consumers to afford homes.[1][3] In some cases, plans for whole developments have been canceled.[2]
There are reasons for this dramatic shift. A big one is the pandemic and the supply chain disruption it caused.[1] With shutdowns all over the world, production of goods suffered. But now, construction trade organizations have started to call for investigations into the continued shortages of some physical supplies needed for construction.[2] Builders are among the people feeling the strain the most. With prices going up, there’s fear construction may become too expensive for end consumers. Ultimately, this could lead to a shortage of work.
One thing contractors can do in such an environment is to control other costs where possible. For example, they may decide to buy used, rather than new, equipment. Some may even take a second look at how they make purchases. The way that businesspeople buy matters.
For example, some people believe that the best way to do business is to pay cash for everything. However, there’s something to be said for using credit. In a situation with rapidly changing pricing, credit gives entrepreneurs flexibility and time to adapt. Spending cash reserves can restrict a company’s ability to adapt and handle other issues as they arise.
The type of credit people choose to use matters, too. Bank loans may offer lower interest than a credit card, but they can be much more restrictive. For example, banks will only finance new equipment. Their applications can take weeks to be approved. At Alliance Leasing, the solutions we offer are different.
We finance the equipment businesses need to get the job done. That includes things like heavy machinery, software, vehicles and tools. Our application is short, and approval decisions usually take just 24 hours. We know that flexibility is important to our clients. The payment plans we offer include seasonal and 60/90 day deferred options.[1]
The best thing about our financing is that it’s fully tax deductible. Under Section 179 of the IRS tax code, businesses can deduct up to $1 million in equipment, provided it’s been put into service during that tax year.[5] So your construction business can catch a valuable break, even in a challenging environment. Contact us today. At Alliance Leasing, we take pride in helping businesses thrive.
[1]https://abc7chicago.com/construction-cost-increase-lumber-costs-2021-prices/10969423/
[2]https://www.nahb.org/advocacy/top-priorities/material-costs
[4]https://www.allianceleasing.net/equipment-leasing/