You can lease everything from copiers to computers. But is it best to rent or should you invest in buying the equipment yourself? Here are some considerations when choosing between leasing or buying office equipment.
Just like leasing a car, you agree to lease the piece of equipment for a set amount of time. At the end of that lease, you can choose to lease a different newer model or buy your own replacement. This means you can easily keep current on updated technology.
Leased equipment comes with a lower cost initially since you don’t have to pay for the equipment all at once. You pay a little each month rather than a sometimes very large sum to buy the machines outright. For a small business without a lot of extra cash flow or without the ability to get a loan to buy equipment, that can be a major deciding factor.
Even though you have to come up with a large sum of money right away, you generally will pay less overall for purchased equipment. If you total the payments you make on the lease, it often costs more than it would if you purchased the item. Plus, it’s yours to keep for as long as you want to use it. When you decide to upgrade, you have the option of selling the old equipment to get at least some of your money back.
You may have a higher tax deduction available to you if you buy your equipment than if you rent it. You can deduct the purchase cost and sometimes the depreciation for the equipment.
If you have the means to buy the equipment, it is often an easier process. You don’t have to go through the application process or fill out lots of paperwork like you do to lease. You might also have more options available when buying.
Making a Decision
It all comes down to what works best for your company. Weigh the pros of each option to decide which makes the most financial sense for your small business.