Equipment Leasing or Buying – Which is Better?
Equipment leasing offers distinct benefits that might make it the best choice for an organization. Some benefits of opting to lease include:
Maximizing purchasing power. Preserving working capital helps ensure you can maintain adequate cash flow and allows you make other investments.
Taking advantage of tax benefits associated with equipment leasing. For instance, lease payments may be fully tax deductible (check with your tax professional to be sure your lease agreement qualifies under IRS requirements).
More frequent access to updates and upgrades. Leasing equipment, rather than purchasing it outright, means you won’t be stuck with obsolete or outdated equipment. Your lease agreement may even provide for periodic upgrades and software / technology updates.
Reducing repair, maintenance and replacement costs. Many lease agreements cover periodic maintenance, repairs or even replacements if something goes wrong.
Potential accounting benefits. Equipment leasing even provides basic accounting benefits, making your balance sheets more attractive to potential investors or creditors, because lease payments are classified as business expenses instead of liabilities or long term debts.