Smart Capital Allocation: A Singapore Contractor's Guide to Leasing vs. Buying Equipment

In Singapore's construction industry, tight budgets and strict deadlines mean that the decision to rent or buy equipment has a direct impact on whether projects stay on schedule and within budget.

Smart capital allocation means putting money into the places where it will make the most money, not just buying more machines. Teesin has been providing rental services for main contractors and sub-contractors.

The Real Cost of Being an Owner: It may seem like you're building assets when you buy equipment, but there are hidden costs that add up:

1) Depreciation: Machines lose 20% to 30% of their value in just a few years.

2) Repairs and Time Off: Bills and delays come with breakdowns.

3) Insurance, Storage, and Low Utilization: Machines that are not being used or are sitting around still cost money without making any money.

The result is that money is tied up in things that don't make much money.

To deal with these problems, many contractors choose to lease, which has a different set of benefits.

Leasing: A Better Choice

1) Leasing is more than just a cost; it's a way to be flexible.

2) Maximize Cash Flow: Get free money for payroll, bids, or growth.

Operational Flexibility: Only use the right machine for the right job when you need it.

3) Less Risk: The provider takes care of maintenance and compliance.

Stay ahead of the competition by getting access to modern, efficient models without having to pay for upgrades.

Just as an example for cost in practice: You need to pay about SGD$350,000 up front to buy an excavator. The cost over five years, including maintenance, is more than SGD$450,000.

Renting an excavator costs about SGD$6,000 a month. If used for one year out of five, the total is SGD$72,000. Leasing saves money and keeps options open as long as usage doesn't change.

When Buying Still Works

It makes sense to own something if you need it every day, your projects are steady over time, or the machine is what makes you good at what you do. Even then, leasing can take care of peak or special needs.

Why Teesin? Teesin has:

A wide range of construction gadgets, from tools to medium-range machinery.

1) Dependable Help: Fast repairs to cut down on downtime.

2) Terms that are flexible: short or long leases.

3) Proven Partner: Serving contractors in Singapore for decades.

Teesin can help you protect your cash flow, lower your risk, and stay competitive.

Conclusion

Leasing gives most small and medium-sized contractors more flexibility, efficiency, and resilience. Companies can finish projects on time and on budget without tying up valuable capital by focusing on the true cost of ownership and using leasing wisely.

--Ching Ching