Leasing vs. Buying Capital Equipment
When it comes time to purchase capital equipment from BuildingPoint Southeast, two options are offered. You can purchase the equipment or you can utilize our lease-to-own program. Both have numerous advantages and disadvantages. Each business is unique, so the decision to buy or lease must be made on a case-by-case basis. Let’s look at each scenario.
When you buy equipment the obvious benefit is that you gain immediate ownership of it. You can sell the equipment at any time, provided that are no financing limitations.
There are also tax incentives you may be able to take advantage of: the Section 179 expense election or bonus depreciation. Section 179 of the IRS code allows a business to fully deduct the cost of newly purchased equipment or software. Bonus depreciation gives you an accelerated depreciation option. (Please check with your accountant to be sure you qualify.)
The primary advantage of leasing is that you have less up-front costs, helping to conserve your cash. So you can obtain the equipment without significantly affecting your cash flow. You have set monthly payments that make budgeting easier. Leases also can have flexible terms, allowing you to negotiate a longer payment term if needed.
Leasing also gives businesses an easier path to upgrading equipment. At the end of your lease, you are usually free to lease a new piece of equipment and turn in your older equipment. You no longer have to deal with the issue of outdated equipment as technology changes.
Which solution is best? There is no easy answer across the board. It really does depend on your company’s needs and what you want out of the equipment. We can help you weigh the options by conducting a cost-benefit analysis. Knowing your project and company goals will help us to find the right solution for you.