There are several factors to consider when you are acquiring equipment for your business. Whether it is agriculture equipment or office equipment, you need to decide if it is better to downright purchase the equipment or lease it from Trimarc, your business equipment leasing company.
To be totally honest, there are advantages in both options, depending on many factors of course. To help make the best decision in any given situation, ask yourself a few questions.
Will Technology in the Equipment Become Obsolete?
There are pieces of equipment that become outdated rather quickly. It might be a wise choice to lease certain types of equipment as you will have the most recent technology. This is really important if technology is critical to your business.
But if your company isn’t reliant on the latest technology or it doesn’t matter if the equipment you are leasing is completely updated on technology, then it is probably more cost-effective leasing used equipment.
How Long Will You Be Keeping the Equipment?
If the equipment you need is for short-term use only, then it makes sense to lease. You will discover that leasing is a better alternative to buying in most of these situations. Leasing is a better option than buying the equipment, using it for a short period of time and then trying to recoup your investment by selling it.
If you decide to use the equipment longer than you first anticipated, many leasing options include buying the equipment when the lease is over.
What are the Tax Benefits?
This is something you need to take up with your accountant. There are tax ramifications for both options as they relate to your business situation. Different types of leases have different accounting for tax purposes.
What Type of Equipment is Best for Your Needs?
You must take a look at the project and determine if you need new equipment or used equipment. New equipment is updated, but used equipment can be just as efficient and be had at a lower cost.
New equipment might have the option for you to purchase it when you are done leasing, so should you desire. This isn’t always the case with used equipment. Something you need to consider.
One thing you will want to do is analyze the cost and benefit of new and used equipment. If you are just starting a business, investing in a lot of expensive equipment can place an undue burden on finances and cash flow. It might be better to start off by leasing equipment until you have the capital to make these types of purchases.
What are Your Finance Options?
You might wish to buy several pieces of large and expensive equipment but you quite simply don’t have the funds. If buying equipment is just not a viable option, then leasing will have to do until you can afford to buy. Leasing requires less cash down and the monthly payments are usually smaller than when you make a purchase.
If you have any question about leasing equipment, contact Trimarc today.