{"id":897,"date":"2020-09-15T19:08:54","date_gmt":"2020-09-15T19:08:54","guid":{"rendered":"http:\/\/65.21.7.236\/s3da-design\/2020\/09\/15\/speeding-up-and-saving-money-should-you-lease-or-buy-equipment\/"},"modified":"2020-09-15T19:08:54","modified_gmt":"2020-09-15T19:08:54","slug":"speeding-up-and-saving-money-should-you-lease-or-buy-equipment","status":"publish","type":"post","link":"http:\/\/65.21.7.236\/s3da-design\/speeding-up-and-saving-money-should-you-lease-or-buy-equipment\/","title":{"rendered":"Speeding up and Saving Money: Should You Lease or Buy Equipment?"},"content":{"rendered":"

No matter what industry your business is in, you\u2019ll need high-quality equipment to start making money and grow your brand. Unfortunately, those pieces of equipment don\u2019t come cheap. In fact, the average business pays between $10,000 and $125,000<\/a> for equipment alone during the startup phase.<\/p>\n

Before you can decide on the types of equipment you need, you\u2019ll want to figure out if it\u2019s best to lease or buy those tools.<\/p>\n

Both options are great for small business owners, but you need to decide which will work best for your current budget. Here are a few key things to think about when deciding to lease or buy equipment for your company.<\/p>\n

Think About Your Savings<\/strong><\/h3>\n

When you make the decision to buy equipment outright, you\u2019ll need to pay full price for the equipment you\u2019re interested in. Though you may be able to finance the purchase with a business loan, it\u2019s always best to pay for the equipment with cash.<\/p>\n

Take a look at your company\u2019s savings and your budget. If you have the option of paying for the equipment outright, it may save you money in the long-run. However, if your finances are tight and you don\u2019t have the money you need, leasing equipment can be a better choice.<\/p>\n

The lease allows you to pay a relatively low monthly fee for use of the equipment for a set period of time. If you end up wanting to keep the equipment after the end of your lease term, you may have the option to buy it at a lower price or renew your lease on the equipment.<\/p>\n

If you go this route, you likely won\u2019t need to provide a significant down payment on the equipment upfront. Keep in mind that some leasing companies may require large security or damage deposit before they will give you the equipment.<\/p>\n

Consider the Tax Advantages<\/strong><\/h3>\n

Both buying and leasing equipment gives you the opportunity to take advantage of certain tax savings.<\/p>\n

When you buy equipment, you may be able to deduct a portion of the equipment\u2019s depreciation value from your taxable income. You can also deduct the full purchase price of the equipment from your taxable income during the first year of ownership.<\/p>\n

When you lease equipment for your business, you\u2019re able to deduct the lease payments from your taxable income at the end of the year. They\u2019re considered a regular business expense and can decrease the amount your business owes the IRS at tax time.<\/p>\n

Keep in mind that both options provide you with distinct tax advantages. It\u2019s up to you and your accountant to determine which option will give you the greatest savings and benefit your business most.<\/p>\n

Decide How Often You Want to Upgrade<\/strong><\/h3>\n

Once you buy business equipment, you own it. This means that you\u2019re stuck with the equipment until you sell it. For some businesses, this makes upgrading difficult.<\/p>\n

You won\u2019t have the money you need to upgrade until you get rid of the old equipment.<\/p>\n

However, when you lease equipment for your business, you\u2019re only locked into that equipment until the end of your lease. If you want to upgrade after your lease is up, you can do so easily. Often, you\u2019ll be able to work with the same leasing company, saving you the frustration of having to shop around. Even better, some leasing companies allow you to upgrade your equipment during the middle of your lease for a small fee.<\/p>\n

If the equipment you\u2019re working with goes out of date quickly or will become obsolete in a matter of months, leasing is the better choice.<\/p>\n

Look at Your Credit Score<\/strong><\/h3>\n

It\u2019s rare for newer businesses to have high credit scores. You haven\u2019t been around long enough to build a solid reputation and proven profit history. If you\u2019re trying to finance the purchase of equipment with a loan, qualifying for the loan may be difficult at best.<\/p>\n

However, when you work with a forklift rental<\/a> provider or other equipment leasing company, you\u2019ll start building your business\u2019s credit score over time. The longer you lease your equipment, the more history you\u2019ll create.<\/p>\n

This can make gaining financing on future equipment purchases easier and more affordable.<\/p>\n

Understand How Equity Impacts Your Company<\/strong><\/h3>\n

Ultimately, buying equipment is an investment in your business. Once you own it, you build equity in the equipment and can keep whatever you make off the equipment if you sell it.<\/p>\n

When you lease, you\u2019ll never be able to build equity in the equipment. Once the lease expires, you won\u2019t be able to sell it to offset the cost of new equipment for your company.<\/p>\n

If you\u2019re worried about being able to recoup your investment, buying your business equipment may be a better option.<\/p>\n

Pay Attention to Maintenance Requirements<\/strong><\/h3>\n

All the equipment your business relies on every day will eventually need maintenance. The more you use it, the more often you\u2019ll need to schedule maintenance appointments.<\/p>\n

When you buy equipment outright, you\u2019ll have to cover the cost of all maintenance upfront. It\u2019s your responsibility to schedule appointments and make sure the equipment stays in good condition for as long as possible.<\/p>\n

When you lease business equipment, the leasing company is responsible for all maintenance and upkeep. This is partly covered by your monthly lease payments. However, you\u2019re subject to the leasing company\u2019s availability and maintenance budget.<\/p>\n

If they\u2019re booked up or don\u2019t have the money to pay for maintenance, you\u2019ll have to wait for your appointment. If you\u2019re not prepared, this can leave you facing serious downtime and can hurt your company\u2019s productivity.<\/p>\n

Is It Better to Lease or Buy Equipment?<\/strong><\/h3>\n

Making the decision to lease or buy equipment is a matter of personal preference. Before you decide, weigh the pros and cons of both options and see how they\u2019ll impact your company.<\/p>\n

If you\u2019re worried about frequent upgrades or don\u2019t have the money upfront, leasing is a great option. However, if you are financially able, buying equipment will often end up saving you money.<\/p>\n

Looking for additional proven tips to help you streamline your business and improve your bottom line? Check out our latest posts for more<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

No matter what industry your business is in, you\u2019ll need high-quality equipment to start making money and grow your brand. Unfortunately, those pieces of equipment don\u2019t come cheap. In fact, […]<\/p>\n","protected":false},"author":1,"featured_media":898,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","inline_featured_image":false,"footnotes":""},"categories":[78],"tags":[],"class_list":["post-897","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private"],"acf":[],"_links":{"self":[{"href":"http:\/\/65.21.7.236\/s3da-design\/wp-json\/wp\/v2\/posts\/897","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/65.21.7.236\/s3da-design\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/65.21.7.236\/s3da-design\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/65.21.7.236\/s3da-design\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/65.21.7.236\/s3da-design\/wp-json\/wp\/v2\/comments?post=897"}],"version-history":[{"count":0,"href":"http:\/\/65.21.7.236\/s3da-design\/wp-json\/wp\/v2\/posts\/897\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/65.21.7.236\/s3da-design\/wp-json\/wp\/v2\/media\/898"}],"wp:attachment":[{"href":"http:\/\/65.21.7.236\/s3da-design\/wp-json\/wp\/v2\/media?parent=897"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/65.21.7.236\/s3da-design\/wp-json\/wp\/v2\/categories?post=897"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/65.21.7.236\/s3da-design\/wp-json\/wp\/v2\/tags?post=897"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}