Whether you’re a small business owner or a manager of a mid-size to large office, the decision of how to acquire your office equipment is a significant one. Should you buy or lease? Here are a few factors to consider. Image Source has offered high-performance office equipment for sale and lease for more than 30 years.
Should you buy office equipment or lease it?
That question has plagued business owners for decades. There are excellent arguments on both sides. While it might be cheaper in the short term to lease office equipment, buying office equipment is an investment that helps business owners build equity.
If you’re looking for office equipment for sale or lease, here are a few benefits and drawbacks of each.
Buying Office Equipment
Owning office equipment offers significant tax advantages. Office equipment ownership is considered an asset, which allows you to build equity, making it easier to qualify for loans and encourage investment in your organization.
The tax incentives are considerable. Section 179 of the Internal Revenue Code allows the full deduction of the cost of certain types of equipment. Additionally, equipment that isn’t eligible could qualify for depreciation deductions.
However, purchasing office equipment outright might not be the best strategy for several reasons. These include the significantly higher upfront cost of purchasing office equipment. If you choose to borrow money for the purchase, it could complicate your financial and business operations if your lenders suspect you might not be able to make repayments.
Owning equipment also means you could be stuck with obsolete equipment if there are innovations that render your equipment unusable in certain applications. Obsolescence not only makes resale highly challenging, but it can also hinder your business operations and make you less efficient and productive than you could be.
The maintenance factor should also be considered. When you’ve owned equipment beyond the warranty period, you will be responsible for all of the maintenance and repair costs, which become more frequent the older the units become.
Leasing Office Equipment
The benefits of leasing office equipment include the lower initial costs. You are able to acquire the equipment you need to conduct your operations without having to spend much money upfront, allowing you to invest in your business during the first critical years. There are also tax deductions you can claim as business expenses if you lease.
Equipment upgrades are also simpler and cheaper. You don’t have to worry about being stuck with office equipment that doesn’t perform up to your needs and expectations because you can just swap it for more technologically advanced models after the expiration of your lease. Also, maintenance will likely be included in the terms of your lease, so you won’t have to pay for basic repairs and services.
But there are also a few drawbacks to consider. You run the risk of paying more in the long-term than you would have if you had bought the unit. For example, you lease a piece of office equipment worth $,4000 at a rate of $40 per month per $1,000, a total of $160 monthly on a 3-year lease. By the end of the term, you will have paid $1,760 more than the equipment was worth when it was new.
If you stop using the equipment, you must either continue to make payments for the duration of the leasing period or take the option of early termination, for which you must pay a considerable fee.
Also, leased equipment won’t build equity.
Ultimately, you must consider your current finances, the equity you hope to build, and the nature of your business before deciding whether you want to buy or lease your office equipment. At Image Source, we’re always ready to help.
For office equipment for sale or lease, please contact the helpful representatives at Image Source for a free quote. To learn more about our office printers and copiers, please visit our information page to discover the models that can help your business achieve its full operational potential.