Should You Lease New or Used Equipment for Success in Your Business?
Renting items you need can be a great way to test something before you make a large investment. One of the best things about leasing anything is if you don’t like it, you don’t have to keep it. In fact, you have to return it when the agreement expires. There are pros and cons to leasing and purchasing, especially when it comes to things like office equipment such as furniture, fax machines, scanners and copiers. What is the best way to go in this situation? The answer may lie in the details of your company’s budget.
Leasing Vs. Buying: The Basics
Leasing anything means you’re borrowing it for a fee. The terms of the contract vary depending on what you’re renting and for how long you need it. If you don’t like the product, you return it at the end in whatever condition the lease agreement sets forth. However, if you do want to keep it, there is usually a buy-out clause that will allow you to purchase the item.
Buying a product outright means you are committing to keeping it. If not, you may wind up shelling out more money over time replacing it.
Pros and Cons of Equipment Leasing
When it comes to your business, there is a multitude of factors that go into financial decisions. Equipment leasing is just one expense you may have to account for monthly. At the outset, leasing over buying may be a good investment only because you may not know how your business is going to develop. Over time, you may not need the same equipment that you needed at the beginning. In this way, renting what you need is a pro. It may also fit better into your company’s bottom line.
The biggest con with leasing is you are investing money in something that you will eventually give back. There will be no return on this investment. You may also always have a revolving door of lease payments and contracts to adhere to and keep track of.
Purchasing equipment may come at a high price, especially when your company is just getting off the ground. Pondering the good and the bad that come with equipment leasing is crucial in making a calculated decision. Investing in your company’s future may require an upfront cost that you can’t initially afford. Having a plan in place with a solid budget outline will assist you in determining whether leasing or buying is the best thing for your business.