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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

Cost Efficiency

Cutting-Edge Tech

Fully Support

Tax Advantages

$1 Buy Out

Cost Efficiency

Leasing office equipment and IT services often require minimal upfront costs, preserving crucial capital for other business needs. With fixed monthly payments, budgeting becomes more predictable, allowing better financial planning.

Access to Cutting-Edge Technology

Technology evolves rapidly, and leasing offers the advantage of regularly upgrading to newer, more advanced equipment without the hassle of selling or disposing of outdated assets. This ensures your business stays competitive and efficient.

Maintenance and Support

Leasing typically includes maintenance and support services. Any issues or upgrades needed are often covered under the lease agreement, reducing downtime and operational disruptions.

Tax Advantages

Leasing expenses are often tax-deductible, providing potential financial benefits to the company.

$1 Buy Out

Also known as a “capital lease,” a $1 buyout lease is like purchasing equipment with a loan.

 

Embracing Flexibility and Innovation

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…

LEASELOAN
Fixed Monthly Paymentxx
Benefits of Early Paymentx
Term FlexibilityMost terms are 12-60 monthsTerms may be limited. based on asset type
CollateralFinanced EquipmentPotentially all company assets
Technology IncludedUp to 100% financing including hardware, software, and implementationTypically 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:  

  1. One fixed monthly payment 
  2. Inclusive of soft costs (installation, training, and implementation) 
  3. No advance payment or deposit required 
  4. No impact on bank lines 
  5. Easy to upgrade or add equipment throughout term 
  6. Lease rates not tied to credit risks 
  7. 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.

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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.

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