Determining whether to lease or buy equipment for your business can be a difficult decision. While there are certainly pros and cons to both, leasing can be more beneficial than buying. Especially when it comes to maintenance costs and tax write-offs, there are several hidden benefits to leasing equipment and machinery that shouldn’t be overlooked.
10 Reasons to Lease vs. Buying Equipment and Machinery
- Less Expensive in the Short Term
Leasing equipment is a much more affordable option in the short-term. While the costs can add up over a long period of time, leasing in the short term allows your business to save substantial money for other projects. This is immensely beneficial if your business is still growing or if you need the capital for a larger purchase down the road.
- Equipment Leases are Tax Deductible
Luckily for business owners, equipment rentals are generally 100% tax deductible as legitimate business expenses.
- Easier to Upgrade Equipment
Unexpected outcomes during your operations may completely change the equipment you need. If you realize you don’t have the right equipment or machinery for the job, upgrading is easier than ever if you lease. This is because you aren’t stuck with an asset you must make continual payments on—if you need to upgrade, it’s simpler than ever.
- Lease Terms Are More Flexible
Along with being easier to upgrade, equipment leases are much more flexible than an equipment purchase. If you need to upgrade or switch machinery, lessors like Equipment Leases have very flexible terms that work for your business. Buying simply does not provide you with this flexibility, as you are locked into a long-term purchase, often with a loan.
- 100% financing Usually Available
A major advantage of leasing is that you can roll all of the sift costs into the lease including delivery, training, insurance, software upgrades etc. This kind of financing flexibility is rarely available in bank financing or traditional lending institutions.
- Eliminates the Need to Trash Outdated Machinery
Equipment depreciates and becomes obsolete fast. When you buy, you risk being stuck with a piece of machinery that doesn’t keep up with industry standards. Instead of throwing out or trying to salvage old machinery every few years, leasing ensures you consistently have the best equipment the industry has to offer.
- Easier to Get Equipment with Iffy Credit
Especially if you are a new business, you may not have the best credit. That’s perfectly fine! Leasing eliminates the need to have years of credit history since you aren’t taking out a loan to finance an equipment purchase.
- Leasing Is Beneficial for Business with Smaller Cash Flows
Newer business doesn’t always have the cash flows to purchase expensive, state-of-the-art equipment. Another major advantage of leasing is that, since it’s also cheaper in the short term, smaller cash flows don’t have to stop you from growing your business.
- You’ll Be Using the Equipment for Less Than 5 Years
Since equipment and machinery become obsolete so quickly, it makes more sense to lease if you plan to use the equipment for less than 5 years. This ensures that your business doesn’t get stuck with outdated equipment and a hefty bank loan to finance a large purchase.
- Leasing Allows Your Business to Stay Competitive
Last but not least, leasing ensures you keep your business ahead of the competition. From helping businesses with smaller cash flows grow, to using the newest machinery on the market, leasing is the simple choice if you want to stay ahead of the competition. If you don’t have the machinery that can get the job done, you can bet that your customers will choose a company that does.
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