Small Business Needs: Should You Lease Or Buy?

Small Business Needs: Should You Lease Or BuyIf you’re launching a new business or going through a period of expansion, it’s normal to feel like you have a long list of needs with regard to equipment. Even just thinking about the high costs of purchasing all that equipment can feel overwhelming and scary as a new small business owner, which is why leasing is such a popular option for this situation. Making this decision is one of the many you will make as a new business owner, and since these decisions early on can be critical, it’s recommended that you work with an Illinois small business attorney from the outset.

Of course, there are advantages and disadvantages associated with leasing versus buying, and it helps to understand the pros and cons before moving forward with equipment purchases or leasing agreements.

One of the biggest benefits of leasing business equipment is that it requires less cash upfront, whereas purchases of brand new equipment can set a new business owner back well into the thousands. If you’re not sure just yet how much you might use, or even like, a machine, you’re better off leasing the equipment and giving it a trial run first. Maintenance contracts are also common with leases, which can save you from the expense and headache of scheduling, waiting for, and paying a repair person. Finally, with technology changing so quickly, you might be better of with rental equipment upgrades.

Buying, however, can help to increase the number of assets connected with your business. In addition, there are tax depreciation advantages to buying equipment, and you’ll own the items once they are paid down, rather than making monthly payments.

Deciding to lease or buy will depend a great deal on the needs of your business at the time. The best way to prepare yourself is to meet with an Illinois business law attorney to ensure that from start to finish, your business is structured for success.