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To hire or not to hire? That is the question! When air compressor hire might be the right solution
This article has been taken from the KAESER Know How Australia Blog
To hire or not to hire? That is the question!
In this blog post we look at the benefits of air compressor hire and when this might be the right solution, as well as highlighting new Government initiatives available when investing in capital equipment.
Whether your business has seen a sudden surge in production in the current economic climate, or you now find yourself considering putting capital investment plans on hold - one thing will undoubtedly have not changed - that being your requirement for a reliable supply of high quality compressed air! As the fourth utility to industry, compressed air will be a life blood of your business. Thankfully, there are a number of options you can take advantage of to ensure your compressed air supply needs are met.
When would air compressor hire be the right option?
There are many reasons why you might consider hiring - or renting - an air compressor;
Whether you need additional compressed air to meet an unexpected surge in production without additional investment cost, or your production has more permanently increased and you are working on designing a new compressed air system - hiring an air compressor provides a speedy short-term or temporary solution to bridge the gap.
Flexibility
Here again when you need a short-term air compressor solution hiring offers great flexibility. And with some air compressor suppliers like KAESER, short-term hire is possible with a minimum rental period of just one day!
Minimise downtime
Let’s say your existing compressor fails and you don’t already have a back-up. Depending on the diagnosis, hiring a compressor may present a quick fix replacement that would cause minimal disruption and downtime to your operations while your existing air compressor is repaired.
Cost savings
When you only need the additional compressed air for a set period of time, it is very likely that there will be cost savings to hiring rather than buying an air compressor to meet these requirements.
Inclusions
When you choose to hire an air compressor the maintenance and service are typically part of the hire agreement. Depending on how long you are hiring the compressor for - minimal if no maintenance work may be required. However, in selecting to hire the compressor, in most cases you will therefore have the peace of mind that maintenance and service are included. This means - no need to spend time getting service quotes, and no need to worry about when service work is due - the supplier takes care of it all.
When would investing be the right choice?
There will of course be numerous situations where investing in new compressed air equipment makes sense. Some examples may be when you are upgrading an ageing compressed air system, to meeting the compressed air requirements of building a new production hall.
New financial initiatives
If investing is the right option for you it’s worth knowing that the Australian Government recently introduced some new financial initiatives to support Australian businesses through the Coronavirus situation.
Instant Asset Write-Off
* At time of writing the Australian Government has extended the increased Instant Asset Write-Off ‘from $30,000 to $150,000 and expanded access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million).'
This now applies 'from 12 March until 31 December 2020, for new or secondhand assets first used or installed ready for use in this timeframe’ 1 .
There is also the Backing Business Investment (BBI) 2 . Also introduced by the Australian Government, this is ‘a time limited 15 month investment incentive to support business investment and economic growth over the short term, by accelerating depreciation deductions.
This applies to eligible assets acquired from 12 March 2020 and first used or installed by 30 June 2021.
Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset cost.’
In our references below you will find links where you can access more information about both of these initiatives.
Conclusion
Whether you’re thinking about hiring or buying, the first step in deciding may well be to consult a compressed air provider that has the expertise and knowledge to
Backing Business Investment
assist you in weighing up your options. * Information correct at time of publishing (September 2020).
References:
1 Australian Government: Increasing the Instant Asset Write-Off www.business. gov.au/Risk-management/Emergencymanagement/Coronavirus-informationand-support-for-business/Increasingthe-Instant-Asset-Write-Off <version date 29 June 2020>
2 Australian Government: Backing Business Investment (BBI) www. business.gov.au/Risk-management/ Emergency-management/Coronavirusinformation-and-support-for-business/ Backing-Business-Investment <version date 29 June 2020>
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