Should You Buy or Lease Equipment for Your Business?

To buy or to lease – that is the question. Many small business owners find this a hard one to answer. Read on as we explore how equipment leasing stacks up purchasing the equipment outright.

Pros of Leasing Equipment

• Conserve working capital: Purchasing equipment can require a significant chunk of working capital. This is one of the main reasons why the option to lease equipment exists. It allows businesses to obtain equipment with little upfront cost or investment.
• Keep equipment up-to-date: If having the latest, state-of-the-art equipment is essential for your business, equipment leasing can be a good option. Depending on your arrangement, you may be able to lease as long as you want and upgrade equipment as needed.
• Tax benefits: Your balance sheet shows lease payments as expenses rather than long-term debt. As always, speak to your accountant about tax implications before making significant financial decisions.

Cons of Leasing Equipment

• Higher cost: When you do the math and break down the numbers, equipment leasing is unfortunately one of the more costly financing options for small businesses. Because leasing companies typically don’t use equipment for the duration of its lifespan, they have to bump up the fees to recoup the cost.
• Nothing to show for it: At the end of the day leasing equipment equates to no ownership. That means despite your investment, there is no ability to resell equipment and recover costs. Original Source...

Contact Us:
Lendified Inc.
330 Bay Street, Suite 306
Toronto, Ontario
Zip Code: M5H 2S8
Business Phone: +1 647 381 9218
Business E-mail: troy.wright@lendified.com