Benefits to Leasing Office Equipment vs. Buying
Purchasing new equipment is easy to understand. If you have enough cash on hand to pay for the equipment, you simply buy it, set it up in your office, and use it. If you use it successfully, you offset the cost of buying it with the added revenue in generates.
Positive Cash Flow
This is the major difference between buying and leasing. Since you don’t have to pay for office equipment up-front, you can strategically invest that money in things that cannot be leased, like marketing campaigns, employee salaries, or research and development.
If your business has a line of credit from the bank, you may want to keep that line of credit clear of equipment-related obligations so that you can cover emergencies or opportunities for expansion. Leases let you compound the capabilities that liquidity offers.
Leased equipment may not need to appear on your company’s balance sheet. You should only have to pay sales tax on each lease payment, rather than the total value of the leased equipment. Furthermore, if you meet certain criteria, your lease payments may be tax-deductible. Learn about Section 179.
Opportunities to Upgrade
Your leasing contract may allow you to trade in your leased equipment for newer, more powerful, and more efficient systems as time goes on. This would allow your organization to stay on top of technological advances without having to constantly buy new and sell equipment to keep up.