The moment you start your own business, you may feel entitled to immediately go shopping for office equipment to furnish it. However, you may be torn between two options: whether to buy or just lease the equipment. Which would be the smarter move? In order to identify which will be better for your business, make sure that you base your decision on your capital and flexibility. To help you through, know how both of these choices can help you or do otherwise.
Leasing office equipment
Although choosing to lease your office materials will give you the chance to be flexible, long-term leasing might pull you down since it can be a bit pricey. An advantage of leasing, though, is that it does not require a down payment – or in some cases, only a little. This will help save your budget a couple folds. Moreover, you may be able to acquire specific tax deductions for lease costs. But the greatest benefit would be that you could easily replace office equipment the moment they get obsolete and hardly-functional.
However, it could have its downsides, too. For one, leasing can be expensive. At times, it would be as expensive as just simply purchasing the equipment instead. More so, you do not own the equipment, technically-speaking, while you keep on paying for it. Furthermore, once you’re in a leasing agreement, you may not be able to change that decision to buying an item instead.
Buying office equipment
A lot of business owners who have more capital would definitely prefer to buy their office equipment rather than lease them. The advantage of buying them is that you can claim ownership over those items, of course. You are not only assured that you will not be accounted for the damages; buying items will also build your list of assets. You could also be able to take advantage of the tax breaks that will be made available for businesses that invest in their office furniture and other equipment. Plus, you will get depreciation deductions for your equipment, too.
On the flip side, buying will require you to give a down payment if you buy on time. It will also restrict your credit, which you may have used on other matters in case of emergency, once you’ve charged your new equipment to your credit line. Moreover, you will need to be able to maintain your equipment yourself and it may cost you a lot of money, not to mention, trouble.
There are pros and cons to each decision, so the choice of buying or leasing would only be up to you in the end. When your business relies on computers and is based on offices that move, leasing might be the good way to go. However, if your business revolves around a permanent central office, you should just consider buying your stuff.