Leasing equipment for your business

Leasing equipment for your business

What does leasing equipment mean and is it better than purchasing outright? This is always a HUGE question for any trades business, as you need a vehicle suitable for your trade, tools, perhaps machinery plus office equipment so you can efficiently run our business.

Leasing equipment means you are able to obtain a piece of equipment and use it for an amount of time before either upgrading to the newer version or deciding that you do not require that equipment anymore.

The type of equipment that you lease is usually big ticket items like cars, large machinery like earth moving equipment, computers and other office equipment and larger tool items.

In a lease you will find that insurance, maintenance and repairs related expenses are included in the monthly cost. You don’t get a choice about what these extras cost are and who they are through. 

Lets look at vehicles first to understand some of the variables that you need to consider.

• Set a budget for either the whole purchase price of the vehicle or what the monthly price could be if you were to lease it. 
  
• Like any large purchase you need to shop around to find the best option to suit you, your business and your needs.
  
• Go with a reputable company that can guide you through all of your options.
  
• Ensure you consider all of the options before you sign any contract. As once you are locked in then you have that obligation for that set amount of time. Are you able to honour that commitment?
  

If you require new machinery or equipment in order to run your day to day business, it is important to weigh up your options between leasing and purchasing the equipment. The points to consider are:

• What is the most flexible option for you to either purchase outright through finance or leasing it for a specific amount of time and then being able to upgrade?
  
• What tax deductions you would be eligible for by purchasing or leasing the equipment.
  
• What does it cost to insure and maintain?
  
• The difference in the flexibility of buying outright compared to leasing the equipment. For example if you lease the equipment you may not be able to modify it, or if you purchase the equipment will it be out of date before you have paid out the finance on it?
  

Overall the best thing to do is research thoroughly, understand all of the options that are available to you. It is a long term commitment that you need to be able to fulfill. Make sure you discuss your plans with your accountant or financial adviser as they have your best financial interests at heart and want to see you and your business succeed.

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