Is It Better to Lease or Buy Business Equipment?
When you need new equipment or more equipment, you need to know if buying or leasing business equipment will be the most beneficial for you and your needs. Exploring the benefits of each will help you to determine which options best match your business needs.
Benefits of Leasing Your Equipment
Leasing business equipment offers you a flexible option when it comes to payments and the equipment types you can get for your business. The out-of-pocket costs are lower upfront so you can get equipment you may otherwise might not be able to afford.
The payments associated with leasing are predictable, making it easy to fit them into your budget. When you sign your lease agreement, you will know exactly what your monthly obligations are so you can work this into your monthly operating costs. You also will not have to deal with a big lump sum payment to get your equipment
The leasing company usually helps to keep your equipment maintained and repaired. This reduces your costs because you will not have to pay for maintenance and repair. Just make sure that you fully understand exactly how the company works when it comes to this so that when your equipment needs servicing, you can quickly get it done. Many companies will also allow you to upgrade as new technology becomes available so that you never have to run your business with outdated equipment.
Benefits of Buying Your Equipment
When you buy equipment, you may be able to take advantage of some tax incentives under Section 179. While there are limits to how much you can claim, it may help to offset your total tax burden.
When you own your equipment, you have total control over how you use it and you do not have to adhere to any rules a leasing company might have. You also have more variety because you can get exactly what you want and you are not restricted by leasing company inventory.
Once you are done with the equipment, you can choose to sell it to recoup some of the costs you spend on equipment. There are no restrictions or limitations that you will need to deal with when you are selling it either because the only person you will answer to is yourself.
As you can see, there are advantages that come with both buying and leasing business equipment. You simply have to think about your business goals and needs and choose the best option for you.