When you start a business, you likely need to acquire some equipment. While you might think that the obvious choice is to purchase it outright, this isn’t your only option. In some cases, equipment leasing may be better for your business. The following are some reasons why.
1. You Can Change Directions More Easily
As your business changes over time, you may find that your equipment needs change as well. If you are leasing, it’s easier to exchange your current equipment for something that will better suit your new business plans. You don’t need to worry about what you will do with the old equipment as you can simply swap it out.
2. You Don’t Have to Worry About Costly Replacements
Even if the general direction of your business remains the same after several years, you will likely need new equipment after a while. As technology advances, older equipment may become out of date and won’t provide the performance that you need. Leasing can be the better option in this case, as you won’t need to sell old items and buy new ones in order to get an upgrade.
3. Your Expenses Are More Consistent
Buying equipment requires you to pay a large about of money upfront. You may also have unpredictable expenses for repairs or other emergencies. With equipment leasing, you have monthly payments which can make budgeting easier. Equipment repairs are also often included in your agreement.
4. It Allows You to Get Equipment When You Need It
When you are just starting out, it can be difficult to get funding for equipment. Spending a large amount of money, even if it’s for something you need, might be out of the question. When you are leasing, you can get equipment for your business without using up all of your funds.
5. You May Pay Lower Taxes
Your company can take tax deductions for equipment used for your business. While you can also do this when purchasing an item, there are still some benefits when it comes to getting a lease. Over time, the value of certain equipment may depreciate, meaning you will be able to deduct less from your taxes over time. With a lease, this amount is based on your monthly payments and will remain more consistent.
While there may be some scenarios where purchasing your equipment makes more sense, equipment leasing is a great option in many cases. It allows for more flexibility if you want to try something new and makes it easier to upgrade outdated technology. It can also be easier on your finances.