Lift trucks like caulk: good gap fillers.

I wanted to share one more observation that came out of my researching lift truck leasing for Modern’s upcoming August Lift Truck Tips column as well as for an article I’m writing for Logistics Management magazine. A couple blogs ago I told you you’re in a better bargaining position than ever, thanks to lift truck providers trying to salvage as much margin as they can in this tough economy.

Well, it turns out not only are leasing terms becoming more flexible, but rental is becoming an attractive short term option for many users when they’re not ready to commit to purchasing or leasing a new lift truck. Ralph Petta, vice president of research and industry services for the Equipment Leasing and Finance Association (ELFA), told me rental is growing in all industries. In fact its flexibility is inspiring innovations in leasing.

Leasing and finance companies will be a lot more innovative in structuring a payment program to match the business, he said. In construction there are skip payments or seasonal payments where the business will only pay the leasing company for the use of the assets as it matches its cash flow. Even in the copier financing and diagnostic imaging businesses there are contingent rents, which are pay as you go, or pay per copy. Similarly a healthcare firm can pay a monthly rental based on how often it uses its MRI or CAT scan. It will pay a usage amount.

The trend seems to be that terms in some sectors are getting shorter for leasing and financing—especially for more high tech equipment that gets obsolete and wears out quicker than others. The same may eventually apply to the more rugged stuff found in the materials handling environment.

Bob Bosworth, vice president of sales for Toyota Material Handling, says his company’s long-term rental business has grown. 

“Some businesses can’t get capital expenses approved right now, but can carry the monthly cost of a rental,” he told me. “They still have the business need to move product and need a forklift and our dealers are able to support them by providing long-term rentals and in essence carrying the asset for them.”

Darlene Harrington, lease marketing manager for The Raymond Corporation, agrees.

“We’re doing more rent to own programs than we have in the past,” she says. “People have the flexibility to pay rent and get through these times, then if they want to own it they can purchase it at any point during the rental.”

If you’ve been doing more creative financing like this to fill gaps in your fleet during this tough economy, let me know. We can all use some inspiration. 

Tom Andel
tandel4315@aol.com