Equipment Rental is a service providing a wide variety of tools, machinery, and equipment, for a certain period of time. Customers such as construction contractors, professional industries, and individual homeowners need to be able to rent anything from heavy equipment to hand tools. In this case, a rental equipment service is incredibly convenient as some equipment is expensive to buy so consumers prefer to rent their own equipment for a temporary purpose at a low cost.
It can be profitable to rent machinery when a huge machine is rarely used and due to it being a lease or rental there is no need to pay for the storage.
There are many types of equipment rental and leasing services:
- Medical rental equipment services offer the tools and equipment for medical purposes: wheelchairs, motorized electric scooters, hospital beds, patient lifts, bedside commodes, oxygen cylinders.
- Farm equipment rental services cover the renting of agricultural vehicles: tractors, cultivators, mowers, harvesters.
- Computer equipment rental includes the renting of desktop computers, printers, and copiers, notebooks, software, servers.
How to Start an Equipment Rental Business?
Investing your money into equipment and renting implies some essential steps:
- Register your equipment rental business as an entrepreneur and get a license in the Internal Revenue Service office or online. You also need to register for state and federal taxes. Create a business bank account;
- Prepare a detailed plan: think of the budget and costs, what tools you intend to offer, analyze the market, prices, potential profits, and of course create a name for your business and decide how to advertise it;
- Get legal advice about how to draw up an equipment rental agreement that outlines the obligations of the lessor and the lessee, protects the rights of both parties of the transaction. It can be an Equipment Rental Agreement or an Equipment Lease Agreement depending on the rental period. They can be very helpful in case some issues occur such as the tools are damaged or not returned, a customer is injured, and others. Include the rental period, delivery terms, and all kinds of penalties;
- Discuss with your insurance agent how you can insure your business.
How to Calculate Equipment Rental Rates?
The equipment rental rate depends on many factors such as the price of the tool, its market demand, and shipping charges. The rental price should also include expenses for depreciation of appliances, maintenance, and repair. At the same time, you can check the offer and prices of your competitors, see how much your potential customers are ready to pay, and then set your price.
What Is a Damage Waiver on Rental Equipment?
Damage waivers are an option for equipment rental companies to protect their assets during the rental. It is usually a basic term in the Equipment Rental Agreement or Equipment Lease Agreement between the lessor and the lessee.
It's an agreement point that makes the customer responsible for certain types of damages regardless of how much you have paid for the damage waiver. For example, extraordinary wear and tear, adverse use conditions, or excessive running time will oblige the customer to pay repair fees. The customer is also responsible for the loss of the rented item and has to replace it in case if it is damaged or lost.
Related Forms and Templates:
You can use this Equipment Lease Agreement Template to lease equipment for a certain fixed period of time.