The Differences Between Leasing and Buying
When it comes to acquiring office equipment and managed IT services, businesses often face the classic dilemma: lease or buy? Both options have their merits, but understanding the nuances and benefits of each can significantly impact a company’s bottom line and operational efficiency.
Benefits of Leasing
Embracing Flexibility and Innovation
$1 Buy Out
Leasing brings the power of adaptability, allowing businesses to stay ahead in an ever-evolving landscape
Lease vs. Buying Comparison
Keep in mind that every lease is different based on many variables. Here’s a general comparison…
|Fixed Monthly Payment||x||x|
|Benefits of Early Payment||x|
|Term Flexibility||Most terms are 12-60 months||Terms may be limited. based on asset type|
|Collateral||Financed Equipment||Potentially all company assets|
|Technology Included||Up to 100% financing including hardware, software, and implementation||Typically limited to hard assets. Bank loans may not cover 100% of costs.|
While most leases have similar features, it’s important to know that not all leases are created equal. Their features will vary depending on the terms of the lease, the needs of the lessee and the lessor. However, here are some common features found in most leases:
- One fixed monthly payment
- Inclusive of soft costs (installation, training, and implementation)
- No advance payment or deposit required
- No impact on bank lines
- Easy to upgrade or add equipment throughout term
- Lease rates not tied to credit risks
- May avoid bank covenants
Making the Right Choice
The decision between leasing and buying office equipment and managed IT services should align with the specific needs and growth plans of each business. Factors such as cash flow, technological requirements, tax implications, and long-term strategies play a pivotal role.
A hybrid approach, where critical assets are purchased while others are leased, might be an ideal compromise for some businesses, offering the benefits of ownership alongside the advantages of flexibility and regular upgrades.
In essence, while leasing offers flexibility and access to cutting-edge technology, buying provides ownership and potential long-term cost savings. Understanding the business’s immediate needs and future aspirations will guide the optimal choice between leasing and buying.
Want To Learn More?
Altek specializes in analyzing your current infrastructure, network security, and office technology to create a plan that aligns with your company’s needs while staying within a monthly budget.