Leasing Equipment: A Viable Option for Small Businesses
Many people wonder if leasing is a viable option for their small business but they don’t know the difference between a leasing agreement and a rental contract and simply purchasing a piece of equipment outright.
The best advantage of leasing a piece of equipment is that you will be saving your capital funds so you will have something in the bank and that is worth a lot more than spending all your money on a piece of equipment. Another benefit to leasing office equipment or any equipment is that you can upgrade the piece of equipment any time during the leasing period. When you purchase a piece of equipment, you are stuck with it unless you can sell it used and used equipment does not sell as well as new, the depreciation value is not as good on a piece of used equipment.
When you sign the leasing agreement, you are also agreeing to pay all sales taxes and other taxes that are associated with the piece of equipment you have just leased. There are some tax advantages to leasing versus purchasing a piece of equipment and that is in the depreciation value.
When you lease a piece of equipment, make sure you understand who is going to be responsible for the upkeep and maintenance of the equipment. Some companies require that your company take care of it and others want to do the required maintenance themselves to make sure their equipment is running in top order.