Starting a business from the ground up is never easy. When you have to get everything put together from scratch, not only can knowing and finding what you need be a challenge but being able to financially secure those items can also be difficult. Luckily, you have some options when it comes to this. So if you’re finding yourself in this situation as a new business owner, here are three things to consider before buying or leasing business equipment.
The Actual Cost Of The Equipment
For most businesses trying to acquire new equipment, the decision is either to buy or lease the equipment. And in many cases, the decision will often come down to a financial one.
When deciding if you should lease or buy, one thing that you’ll want to think about is the actual cost of the equipment. As a general rule of thumb, if the equipment will cost less than $3,000, you might have a hard time finding something that’s available for lease.
In this situation, you may have to find financing to buy it outright, be it new or used equipment. But for more expensive equipment, leasing might make more financial sense for you since that big of an investment isn’t easy for many new businesses.
The Tax Implications
It’s not only the initial costs of the equipment that you’ll have to think about when you consider the financial implications of buying or leasing business equipment. Another thing you think about is the tax implications.
If you’re looking to get a break on your taxes in any way you can during your first year of operations, buying equipment might work out better for you. However, make sure you speak with a tax professional about what the actual tax implications will be for your specific business based on the current tax code, as things can and do change.
The Wear And Tear
Something else to consider when deciding whether you should buy or lease the business equipment you need is how much wear and tear you anticipate putting on this equipment before it becomes outdated or obsolete.
For some businesses, buying one piece of equipment will work for them throughout the lifetime of their business. In this case, it might make sense to buy the equipment for yourself. But if you’ll have to replace this equipment after a short period of time or know that the technology used is ever-evolving, leasing could be a better and smarter option.
Getting everything you need to get your new business up and running doesn’t have to mean pouring all of your money into buying brand-new equipment. So to help you figure out the best combination for you, consider the tips mentioned above as you decide whether to buy or lease what you need.