Should You Lease or Buy Business Equipment?

Business practices point to anything that does not drive revenue as a cost, and as such, you must make hard decisions about what to pay for and what to sacrifice to meet the bottom line.

In other words, you have decisions to make about what to spend your money on, what sacrifices to make, and what you can take off the table.

Equipment sits in the middle of this spectrum. The question comes up often, “Should we lease or buy business equipment?” The answer is yes, but it depends.

Let’s take a look at the basics to help you choose.

What to Consider 

If you’re trying to decide whether to lease or buy business equipment, there are a few things you’ll need to consider. First, think about how long you’ll need the equipment.

Think about it. If you only need it for a short period of time, laundry equipment leasing might be a better choice.  

On the other hand, if you plan on using the equipment for many years, buying it may be the better option. You’ll also need to consider how much money you have available.

Sometimes, you can’t afford to buy the equipment outright, leasing may be the only option. However, if you can afford to buy the equipment, you may get a better deal in the long run by doing so.

Ultimately, the decision of whether to lease or buy business equipment comes down to your specific needs and circumstances.

Disadvantages

There are a few disadvantages of buying business equipment that you should take into account before making a decision. One is the initial cost of purchasing the equipment which can be significant.

The initial cost of purchasing the equipment is often cheaper when you lease, but you may end up paying more in the long run. When you buy, you own the equipment and can sell it when you’re done using it which could offset the initial cost.

Additionally, there are tax benefits to both leasing and buying, so you’ll need to talk to your accountant to see what makes the most sense for your business.

Another is the cost of maintenance and repairs, which can also add up over time. If you lease, you may have to pay for some repairs, but the lessor is typically responsible for major repairs and maintenance.

But if you buy, you will be responsible for all repairs and maintenance costs. You should consider the expected costs of repairs and maintenance when deciding whether to lease or buy business equipment.

Finally, you will also need to factor in the cost of storage and shipping if you need to move the equipment around.

Decision Making in Business Equipment

If you’re trying to decide whether to lease or buy business equipment, it’s important to consider the pros and cons of each option.

Leasing business equipment can be a good option if you don’t have the up-front cash to buy equipment outright, or if you want to preserve your capital for other investments.

Buying equipment can be a good option if you plan to use it for a long time and you’re comfortable with the upfront cost.

Ultimately, the best option for you will depend on your specific business needs and financial situation.

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