Leasing vs Purchasing Equipment for Businesses
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Leasing vs Buying Equipment
Pros and Cons of Leasing Equipment
Down payments are usually lower than financing (and sometimes no down payment is required) Terms are often flexible (e.g., can buy out lease) Allows you to test out equipment before you commit to it Maintenance and repair costs are usually free Monthly lease payments may be tax deductible Can be easier to get than a loan if you don’t have good credit Easier to upgrade after your lease expires You don’t own the item while leasing it Will likely have a higher overall cost Depreciation is not tax deductible You’re obligated to stick with the lease even if you no longer need/use the equipment Termination fees for breaking the lease contract
Pros and Cons of Purchasing Equipment
You own the equipment Lifetime cost is usually less than leasing Counts as an asset on your balance sheet Can likely claim depreciation on your taxes Free to use equipment however you choose Can sell the equipment after using it Need more cash or credit up front Can’t always test out the equipment before purchasing You are liable for maintenance and replacements May get stuck with old and outdated equipment If you finance it, will Increase liabilities on the balance sheet, which could prevent you from borrowing more money
What Types of Business Equipment Can You Lease?
Audio equipment Communication equipment Company vehicles Computer hardware Computer software Construction equipment Digital signage Fitness equipment HVAC systems Lighting systems Manufacturing equipment Medical equipment Office furniture Office equipment Copiers and printers Fax machines/scanners Point-of-sale systems Security systems Call center systems Wireless point-to-point systems Video surveillance Warehouse equipment
Pros and Cons of Leasing Computers
Pros and Cons of Leasing Business Vehicles
Pros and Cons of Leasing Warehouse Equipment
What to Consider When Choosing Whether to Lease or Buy
How Much Cash Do You Have?
What Will the Equipment Be Used For?
Is Handling Equipment Maintenance Doable?
Is Your Business Structured for Growth?
Leasing vs Financing Business Equipment
4 Ways of Financing Business Equipment Purchases
1. Small Business Loan
2. Equipment Loan
3. Business Credit Cards
4. Small Business Grants
Frequently Asked Questions
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