Lease Vs. Buy
Here are some things to consider when comparing an equipment lease to an equipment purchase.
Leasing Your Equipment
Leasing helps keep your equipment updated and hedges against obsolescence. With a lease, you pass the financial burden of obsolescence to the equipment leasing company.
When you lease you’ll have predictable monthly expenses. With a lease, you have a pre-determined monthly line item, which can help you budget more effectively.
Leasing allows you to pay nothing up front. This helps you keep your cash flow free. Leases rarely require a down payment, so you can acquire new equipment without exhausting much-needed funds.
Leasing helps you keep up with your competitors. Leasing can enable your business to acquire sophisticated technology, which might be otherwise unaffordable.
Buying Your Equipment
The initial costs for needed equipment may be too much for your business. You may have to tie up lines of credit or cough up a hefty sum to acquire the equipment you need. Those lines of credit and funds could be used elsewhere for marketing, advertising or other functions that can help grow your business.
If you buy your equipment, eventually you may be stuck with outdated equipment that you will have to donate, sell or recycle. A growing business may need to refresh its technology and equipment as often as every 18 months.