Your business needs new equipment, maybe a printer or copier, and you need to decide whether to buy the equipment outright or lease the machines through a business services provider. How do evaluate the options when making this decision? Here are a few things to think about before deciding.
Cost is frequently a primary consideration when comparing leasing and buying. It is almost always less costly upfront to lease the equipment your business needs than to purchase it outright. When purchasing an office machine, the entire cost is paid by you at one time, which can be difficult for a small business to absorb, especially when just getting started.
Leasing companies offer technology solutions Jackson MI that can get you up and running with less required capital. Maintenance costs and tax benefits should also be considered. Leases often include a maintenance contract in their terms, meaning there may be no additional costs to maintain the equipment you use. Purchasing, on the other hand, requires you to budget for maintenance and repairs, whether you perform them yourself or use an outside service.
Leasing and buying both offer tax benefits, but they differ in how they affect your company’s finances. Lease payments themselves are typically considered a deductible business expense, allowing you a small, ongoing deduction for as long as you lease your office equipment. Buying, on the other hand, usually means you can deduct the full cost of your equipment in the year that you purchase it. This is a one-time deduction, but it is significantly larger, usually than the yearly deductions allowed when leasing.
Another consideration is the ownership of the equipment itself. When you purchase the devices you need, they are immediately yours to do with what you please. You can make any necessary modifications to the equipment. You can maintain it in any way you see fit. If you no longer need the equipment, it is yours to resell. Conversely, it is also your responsibility to replace the equipment if it breaks beyond repair, or when it becomes obsolete or no longer meets your business needs.
If your equipment is leased, you may only modify it within the bounds of any contract you have, but you have much more freedom when your equipment is in need of an upgrade, whether because it no longer works with new and updated software and hardware, or because your business needs have evolved over time.