Your company thrives because of your ability to provide excellent products and service. Much of the outstanding production is attributable to your ability to have the most up-to-date equipment. Should you buy or lease your supplies, though? While buying certainly has advantages, there are also perks to leasing equipment that should not be overlooked. Read on to learn more about weighing your options to make the best choice.
Leasing vs. Buying
Leasing equipment comes with many advantages. One perk of renting manufacturing supplies is the reduced expense at purchase. Since you are only borrowing the equipment, you do not need to put down such a big down payment. Many lease agreements rarely require a down payment. Those contracts that do demand an initial payment to start the agreement still do not call for as big of an initial fee as you would have to pay if purchased the equipment outright.
Leases also come with flexible terms, which means that you have several money-saving options if you have above average credit. Those with troubled credit may find it more difficult to obtain a favorable lease without a significant down payment. Such is the reason why some business owners prefer buying equipment over renting supplies.
Buying certainly comes with its advantages. The tax deduction for such supplies can be significantly greater thanks to the depreciation deduction as stipulated by Section 179 of the Internal Revenue Service (IRS) regulations. Ownership is another perk of buying instead of leasing equipment. The supplies serve as an asset in times of need.
One major disadvantage of buying instead of renting manufacturing equipment is the substantially higher initial expense. You also have the possibility of getting stuck with outdated equipment that you cannot sell to upgrade to new supplies.
For Temp Projects
Leasing may be the better option if you are conducting a temporary project that requires additional equipment. You do not want to invest in supplies that will not be used after you have finished the task. At the same time, it is necessary to have the necessary supplies to put your best foot forward. A leasing option may solve all of your problems.
How Do You Choose?
Say you are in need of a fire tube steam boiler for a project. Choosing between buying or leasing ultimately depends on the situation. Renting is an excellent option if you have equipment that requires upgrading every two to four years. Buying products could work if you want equipment that lasts for many years. Think of how much you want the initial investment to be, storage space, and weigh your option. No option is better than another, it all just depends on your specific needs You may rent some equipment, lease some and buy some. Research and figure out your specific project management needs.