To Buy or to Lease? – Getting Equipment for a New Business

When a business needs to obtain equipment to operate, there are numerous equipment leasing options available. Equipment leasingprovides benefits to which outright purchase simply cannot compare in terms of financial gain and convenience.

One equipment leasing option is known as the finance lease. This equipment leasing option is typically best suited for business owners who intend to keep their equipment for a long period, even after the lease period is completed. The payments on this type of equipment leasing option may also be aligned to match the expected working life of the equipment.

Another equipment leasing option is known as a true lease. This type of equipment leasing option does not traditionally align with the working life of the equipment. Instead, at the end of the lease the business will have the choice of disregarding the equipment or purchasing the piece of equipment at the current market value.

One of the main advantages of this type of equipment leasing option is that payments are usually lower than on finance leases.

Various other advantages may be associated with different equipment leasing options, so it is important to consider carefully. For example, a true lease option may provide business owners with the opportunity to claim lease payments for tax purposes. Generally, no such tax breaks are available with a finance lease option.

As finance lease options do tend to spread payments out over a longer period, business owners should carefully consider which options best suits their needs.

Regardless of the type of equipment leasing option a business owner ultimately chooses, it is clear that leasing provides innumerable advantages over outright purchase. Business owners are able to retain more capital for operating expenses, grow their businesses at a faster rate and take advantage of technology as it becomes available.