Most businesses, whether large or small, need at least some tech equipment to operate on a day to day basis. When you need tech equipment, you have two basic options: lease or buy.
Choosing to lease or buy tech equipment should not be a spur-of-the-moment decision. There are several factors that will influence the option you choose, and sometimes there are multiple departments in a business that should be consulted. In short, deciding whether to lease or buy tech equipment should be a team challenge.
Technology Changes Rapidly
It seems like every time you buy a new piece of tech equipment, it is rendered obsolete by a newer and shinier model. When you lease tech equipment, free or low-cost upgrades are often included in the monthly fee. You don’t have to go out and buy all new equipment because it is provided for you by the lender.
This also means that you won’t have to worry about losing ground to larger competitors. If you own a small business, it might be best to lease tech equipment because the competition has already purchased it. This can help you keep your head above water in the fight for customers.
You Might Drown in Paperwork
On the other hand, if you buy tech equipment, you won’t have to deal with the hassles of a complicated lease. In the latter case, you’ll need to provide documentation of your ability to pay, sign contracts full of complex legal jargon, and read the fine print so you know exactly what you are getting.
Many business owners choose to buy tech equipment so they can bypass that stage entirely. To buy, all you need is cash in hand and a reputable seller. This is one reason to consider a virtual address. The price is sometimes worth the convenience if you place a high value on your time.
Cash Flow Consistency
Another benefit when you lease tech equipment is the consistency of your expenditures. You’ll know exactly how much you have to pay every month to fulfill the contract, and this brings peace of mind to many business owners.
However, you’ll pay less over the long haul if you buy tech equipment. Leasing is more expensive because you are paying for the convenience of leasing and for any support or upgrades the lender provides. Leasing companies have to make a profit, so the excess is passed on to you.
Freedom is Priceless
Any time you lease tech equipment, you will find yourself bound to certain rules and guidelines. For example, you might be required to run maintenance at certain intervals to ensure the viability of the machinery. You might also be required to store tech equipment in certain conditions.
When you buy tech equipment, you have the freedom to use it as you wish. You can transport it and treat it however you’d like, and this can be a serious benefit.
Evaluating Your Options
Like most things in the world of business, it is never as simple as should you lease or buy tech equipment. There are several mitigating factors that will influence your decision, so make sure to get the specifics up front.
For example, if you intend to lease tech equipment, make sure you know whether you’ve sign a finance lease or an operating lease. With the finance lease, according to eLease.com, you can count the tech equipment as assets to your business and purchase it at the end of the lease for a nominal fee.
When you buy, however, there are similar factors. Make sure you’ve researched as many vendors as possible before you buy tech equipment to ensure you get the best deal. It is also a good idea to ask about incentives for purchase, such as extended warranties and ongoing support from the vendor.