Forklift Financing

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Page written by Chris Godfrey. Last reviewed on February 14, 2024. Next review due October 1, 2025.

Forklifts are essential business equipment for all types of organization, but with sticker prices ranging from $15,000 to $50,000, they don’t come cheap. Paying this kind of cost using working capital is not only financially inefficient, it can also be prohibitive. However, there’s an answer to this problem: Forklift financing. Pay for the equipment as you use the equipment. Give your organization the machinery it needs without hurting cash flow.

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What is forklift financing?

Forklift financing – also known as equipment financing – is a type of business loan used to support the purchase of new or used forklifts. This type of financing gives organizations an alternative way to pay for one or more forklifts without putting strain on working capital by buying machinery with cash.

What are the benefits of financing a forklift?

Financing your forklift purchase has many benefits:

Retain valuable working capital for use elsewhere in your business
Immediate equipment acquisition – may show as an asset on your balance sheet
Low or no down payment
Buy over time – pay for your forklift with affordable monthly payments
Preserve other credit lines
Utilize Section 179 tax benefits to lower your tax burden

How does forklift financing work?

There are two types of forklift financing:

Finance (also known as a forklift loan)

Forklift finance is a straightforward business loan. You make a down payment on the forklift and then pay off the balance of the purchase price, plus interest, with regular payments over a fixed-term contract. The equipment acts as security for the loan. When the agreement comes to an end, the forklift is paid for and yours to keep.

Advantages of a forklift loan:

Own the forklift outright when the contract ends
Add the machinery as an asset to your balance sheet from date of purchase

Disadvantages of forklift loan:

Higher monthly payments because you are paying back the total forklift price

Lease

A forklift lease is really a long-term rental agreement. Because you are only financing some of the purchase price, leasing typically has lower monthly payments than a finance/loan. With a lease, you make a down payment and then pay a regular sum plus interest each month to use the forklift. At contract end you can either give the equipment back to the lender, renew the lease at a different cost per month, or buy the forklift for the fair market value – this is commonly known as a ‘balloon payment’.

Advantages of a forklift lease

Lower monthly payments
Option to buy the machinery or lease a newer forklift at contract end can give you better financial flexibility and/or a more modern machine

Disadvantages of a forklift lease:

Balloon payment could be more than the forklift is worth at contract end
Becomes a liability on your balance sheet

Can I write off a forklift?

Yes. The IRS allows businesses to write off the cost of tangible property when used in the course of their business operations – including forklifts.

Get started with Swoop

Working with business finance experts can make all the difference when applying for forklift financing. Contact Swoop to discuss your borrowing needs, get help with your application and compare top-quality forklift financing from a choice of lenders. Give your business the equipment it needs without putting strain on cash flow. Register with Swoop today.

Written by

Chris Godfrey

Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.

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