The Pros & Cons Of Leasing Vs Buying Office Equipment

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One of the perennial questions which arise when considering the acquisition of business assets like office furniture and equipment is whether to lease (rent) or buy the equipment outright.

This question applies regardless of whether the situation is a new business start-up or the expansion or upgrading of an existing concern. Here is a breakdown of the typical pros and cons of those options when considering a new office acquisition.

Is keeping up with technology a consideration?

Depending on the type of equipment the business intends to acquire, the consideration of obsolescence may be a prime consideration. A typical example of this is computer equipment. Perhaps more than any other item of office equipment, the computer has traditionally been rapidly superseded by models with faster processing speeds and increased storage capability.

Mobile phones can be considered in this same category, with newer, upgraded models very rapidly replacing older technology.

For that reason, a leasing arrangement may become the preferable option when considering the commissioning of a new computer intranet system or when acquiring company mobiles for employee usage.

Some of the pros of leasing such equipment are:

  • Ease of updating to newer technology as it becomes available.
  • Maintenance, repair, and upgrade expenses typically become the responsibility of the lessor.
  • Lease costs may be claimed as a tax deduction.

On the converse side, some of the cons may be:

  • Reliance on the support network and requirements of the leasing company rather than a support network of choice.
  • The business may be bound by fixed leasing or renting terms.

Office tech support equipment

Other items of related office equipment such as printers, scanners, and photocopiers are less affected by obsolescence and supersession.  A support company like gbsflorida.com may be referred to for advice and assistance.

In general terms, the pros for outright purchase of such equipment items include:

  • Equipment depreciation costs may be claimed as tax deductions.
  • Most suppliers will provide an equipment maintenance and repair option as part of the purchase arrangement.
  • There is no locked-in minimum term of ownership – the business is free to de-commission or sell the equipment at a time of their choosing.
  • Equipment may be modified or altered according to need.

The cons of an outright purchase option include:

  • If no maintenance option is included in the purchase deal, maintenance and repairs may have to be arranged by the business, which then bears the attendant costs for such work.
  • Expensive equipment purchases may result in cash flow and liquidity problems for the business.

General considerations

Whether the decision is made to lease or purchase new equipment, a number of general factors should be initially taken into consideration.

Prepare an inventory list: Establish the business equipment needs, including any ancillary equipment which may be needed to supplement the acquisition. This has an additional benefit, as a cost-effective deal may be negotiated with a supplier for the acquisition of multiple items.

Research the market: Shop around, and consider selecting two or three different options before making a final procurement decision.

Check after-market support: Where equipment downtime is a consideration, ensure the after-sales support, including local repair and maintenance network, is available and reliable.

A little time spent in preparation and planning goes a long way to ensuring the best acquisition choice is made.

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