Is It Better to Rent or Buy New Office Equipment?
Obtaining equipment for your business can be a tricky matter, because there are a couple of different ways to go about procuring the particular equipment you need. Buying is one obvious option, but another route that many business owners fail to consider is renting or leasing. Which of these two options is best for your business will depend on the particulars of your situation. Each route has its own advantages and disadvantages, so it is important to weigh the pros and cons of both sides before deciding what to do for your business.
Leasing is often the preferred option of business owners who are operating with limited capital. Start ups and established businesses experiencing periods of stagnancy may be more apt to choose renting equipment. Everything from computers and copiers to fax machines and printers could be procured for your business to use without incurring the expense of these items at full price. It is a good way to save on initial investments when funding is tight.
For many businesses, lots of equipment needs to be upgraded after relatively short periods of time. In cases such as this, buying office equipment is akin to starting a bonfire in the middle of your office and throwing fistfuls of cash into it every few minutes. Computers are particularly prone to rapid aging, and often become inadequate or obsolete in just a few years. Renting equipment allows for easier upgrading when you eventually need to obtain more advanced systems that can keep up with current technology.
Leasing, however, is more expensive for any given item in the long run. Although you avoid the initial investment, the rental payments up until the end of the lease period will exceed the actual cost of the items. This can become a major disadvantage to the leasing system, particularly if your equipment is still useful after the lease period has ended.
Purchasing new office equipment outright gives the advantage of a lower overall cost, if you can afford the investment. Plenty of office equipment is also more resistant to obsolescence, and these items are more prudently bought than they are rented. Paying rental rates for things that you'll be using happily for years to come is simply bad business.
Buying new equipment can also present tax breaks for your business. Tax deductions on newly purchased office equipment can end up saving you even more money, leaving you with a healthier state of finances when all is said and done. The savings could literally amount to thousands. The simple advantage of true ownership of the equipment is also enough to make purchasing worth the investment.
All in all, equipment leasing and buying have their own particular ups and downs that should be considered before entering into any purchases or rental agreements. Think about how long your equipment will last you, how much it will cost in the long run, and how much you could be saving depending on which path you choose. No two businesses are alike, so you'll need to weigh the pros and cons against your own unique situation.