4 Things to Consider When Leasing Equipment
The choice of leasing equipment or buying equipment for your business is one that shouldn’t be taken lightly. Both options come with distinct pros and cons.
Below are some important things to consider when deciding on leasing compared to buying equipment for your business:
Do you need equipment that becomes technologically obsolete quickly?
Leasing is a great option for businesses that rely on equipment that goes obsolete quickly, such as printers, computers, vehicles, tablets, smartphones, etc.
An operating lease allows you to acquire the latest equipment at a small upfront cost, use it to grow your business, and then have no obligation to purchase or maintain it at any point during the contract.
Is the equipment the type that does not become obsolete very quickly?
In this case, you should consider a lease option that will allow you to purchase the equipment at some point, particularly a capital lease. In that way, you can keep your upfront costs low while still exercising an option to buy so you can obtain the title to the equipment at a fair price.
Do you want minimal responsibility for maintenance as well as flexibility?
Leasing business equipment allows for the utmost in flexibility. Although you cannot typically terminate a lease agreement without a fee, you are usually not obligated to maintain the equipment, as it is usually new and warrantied.
You can keep your equipment new and fresh every few years and avoid the hassle of having to sell it, often at a major discount unless you want to spend the time to haggle and market the equipment.
Do you want to keep your costs low?
It’s hard to keep your costs low when purchasing equipment, there’s the down payment cost, monthly payment, maintenance and more.
Most of those costs are avoided with a lease. With a minimal to no down payment, a low monthly payment, and no need to have a maintenance staff or budget, leasing is often preferred.
Of course, leasing has aspects which can be seen as disadvantages, such as the requirement to fulfill the full lease term, a lack of an ownership option for some types of leases, and what can sometimes amount to higher long-term costs.
The decision to lease or buy equipment really depends on your situation. Leasing is an attractive option for many businesses, but it’s best to meet with an expert to determine what will work best for you.
Contact Alliance Funding Group today at 1 800-978-8817 to discuss leasing versus financing equipment for your business.