A question that business owners often ask themselves when it comes to office equipment is “should I lease or buy?” It is a conundrum that is easily answered, if one takes time to think about the advantages of leasing over buying. Of course, there are many considerations to take into account when making the decision between leasing and buying, but increasingly businesses are taking the former option for all the benefits it offers.
Here are the advantages of a renting office equipment rather than buying it:
- Technological advances are being made with increasing pace these days. What was a valid method of operation yesterday is likely to be obsolete tomorrow. Leasing gives the flexibility to update outmoded equipment when necessary, meaning an office benefits from the most modern and advanced work processes available. This increases productivity.
- Purchasing a depreciating asset ties up capital. Even if buying equipment with the aid of a bank loan, it’s often the case that the bank will loan only 50% to 70% of the total required. Free capital can be used to invest in the business and increase profits. Capital that is locked away in office equipment will not be available to do this. Equipment leasing does not suffer this up front cost, and can often be provided on a 100% basis.
- Financing payments can be structured in a way that satisfies the budget needs of the business.
- Equipment rentals are an operating expense of the business. This means that the business can take advantage of taxable deductions on its lease payments over the entire term of the lease, and means that the company will ultimately pay less tax. When buying equipment for the office, sales taxes are added. Leasing avoids these taxes, too.
Leasing office equipment gives businesses the flexibility of taking advantage of advances in technology, as well as cost and budget benefits. By maintaining capital at the outset, the balance sheet is improved which will help when seeking financing for business expansion. A register of depreciation is no longer required, payments under the lease agreement are deducted as operating expenses for tax purposes, and equipment insurance is available at very competitive rates.
Whether a business decides to buy or rent, it is wise for it to explore all financing options available. Whilst large nationally recognised banking concerns are normally the first port of call, here at Finlease we are approachable, offer greater flexibility with financing, and provide a more personal service. What’s more we take the time to visit you and understand your unique business situation to ensure you get the best solution for you. If you are not satisfied with our solution, simply walk away with no cost. We are delighted to seek approvals as over 85% of them are taken up by clients!
To speak to one of our business finance experts call 1800 358 658 now!