Sometimes, replacing and improving new technology is a big decision to make. For instance, office equipment like printers are expensive, so it’s not easy to spend at all. There is always a struggle for business owners: to balance their finances and budgets.
No matter how large or small the business standing is, many businesses always wonder, what is the best way to do? Buy or lease office equipment.
It’s not an easy choice to make! It is why in this post, we will compare the pros and cons of buying or leasing and which one is good for the long run.
Leases For Company Equipment Types
Your decision will boil down to what type of business you have. However, if you want to opt to lease equipment, there are two choices. These are Operating and Capital leases, so let’s differentiate this two.
It is also known as fair market value leases. Many businesses and companies always choose this one because of its benefits. The first one is they have a lower monthly fee. Because the equipment is simply for rent, the renter will not include the assets in their balance sheets.
The renter can buy the rental equipment. Nevertheless, the renter will compute the final price based on various factors. Also, this option is best for companies and businesses who want to lease new versions of equipment constantly.
It is known as the $1 buyout lease. The difference between capital leases is that it is similar to a loan, wherein interest and principal payments are made. These expenses will all be put into the lessee’s balance sheet. Because of this, you will be paying a higher monthly rate.
Capital leases have an advantage too. For instance, the buyout price is specified in the agreement at signing. So, in the long run, it will be worth it.
The Advantages of Leasing
- You can avoid obsolescence since businesses and companies have the freedom to choose the brand and type of printer. They choose the basic one most of the time, which is less likely to be harmed by obsolescence.
- Have many equipment options.
- You can obtain printers and office equipment at a lower price.
- There are no complications when you lease a printer.
- There is no downpayment when you lease.
- Leasing allows you to keep up with the new technology that is too costly to buy.
The Disadvantages of Leasing
- It is more expensive. Most equipment renters will pay more than the value of what equipment they rent. They pay higher than the market value and other expenses like maintenance and interest.
- There is a contract involved, and it may be a hindrance in the long run. For instance, when the leasing contract started, the business only had 2-3 employees, but now, it has 60+.
- You will still need to pay for the equipment even after you are done using them.
The Advantages of Buying
- It is more affordable in the long run since you will not pay interest. At the same time, you have all the power to use it without worrying about other fees.
- You have all control over the maintenance.
- As business owners, you have the power to deduct your equipment purchase, not the lessee.
The Disadvantage of Buying
- Buying equipment is more expensive than leasing. Most of the time, there are circumstances with finances like the line of credit and funds. Instead of putting all funds in buying, you can use them for your business.
- You will be responsible for all the expenses of your equipment. And sometimes, there is a high and unexpected maintenance cost that is not factored in the initial purchase.
- As businesses, there is always a development for at least two years. It is why you need new and updated equipment. However, when you buy, your goal is to use them for a long time which is not workable for some.
Your decision, whether to buy or lease, will all depend. Sometimes, your business needs are feasible with buying and not on leasing. However, if you are still undecided on what is best, we can help you.
If you are in Austin and you are looking for a Copier in Austin for your business, you may contact Clear Choice Technical Services in Austin. You can ask about Copier Leasing Services in Austin, Copier rental services in Austin, and Copier Repair in Austin.
We specialise in assisting businesses with their decision-making in all their technology needs. Contact us now, and we will help you in deciding whether to lease or buy.