Equipment Leasing vs. Equipment Purchasing

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Friday, May 6th, 2016

Regardless of what type of business or industry you are in, your equipment will be a key element in their success. Once you determine what equipment your company requires, the next major consideration is how to finance it. Is it better to purchase or to lease? The size of your project and the type of equipment it requires, however, are two factors that will determine whether it is a sound business move to lease or to purchase the equipment your business requires.

It is not a quick or simple decision. Beyond the overall cost to buy or lease a piece of equipment, there are other considerations: the cost of maintenance, repairs and the possibility of tax deductions that may offset some of the cost of ownership. National Business Capital, a leading alternative financing company, has prepared the pros and cons of equipment leasing versus equipment purchasing to assist you in making a critical business decision.

What to Know Before You Update Your Business Equipment

Equipment Purchasing:

Cons-

  • Initial cost may be steep and use up working capital versus lower monthly leasing payments.
  • Technology becomes outdated quickly. Ownership may mean keeping obsolete business tools until the working capital is available to replace them.
  • Maintenance and repair can be expensive. Review warranties and consider maintenance contracts.

Equipment Leasing:

Pros-

  • Equipment leasing is a sound choice if your business is technology-driven and requires frequent updates.
  • Lower up-front costs and predictable payments facilitate budgeting.
  • Leased equipment costs may be fully tax-deductible as an operational expense.

These are the basic considerations when reviewing the best way to acquire new business equipment. If you have questions about financing your new equipment, National Business Capital’s Business Consultants will be glad to discuss your individual requirements. For a confidential consultation, call us at (888) 888-9124.

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