Buying or Leasing Equipment

September 15, 2012 in , , , ,

When starting a business, you want the most cost-efficient options to help you keep expenses low. When it comes to equipment, sometimes leasing it, instead of buying it, can be the best option. There are many variables that should be considered, including costs, use restrictions and legal parameters.

What to Consider When Leasing Equipment

There are many variables that should be considered when making the decision to lease equipment, including costs, use restrictions and legal parameters. Here are just two considerations:

  • Leasing operating equipment, such as computers, vehicles, and machinery, often makes more sense than buying. However, while favorable leases are often a good strategy, unfavorable ones can easily sink an emerging venture. Doing your legal homework can help prevent bad deals. Don’t forget: It’s always a good idea to have a lawyer look over a lease before signing it.
  • Is your lease likely to be deemed a purchase for tax purposes by the IRS? If so, leasing may not give you a tax advantage. If not, you may be able to deduct payments on the leased equipment. Here are some IRS Guidelines for you to use as a reference.

What are the Pros and Cons of Leasing?

View the advantages and disadvantages of leasing your equipment before making your decision.

Still not sure if you should lease or buy your equipment? Use the equipment lease vs. buy calculator to help you estimate your costs.

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