Should You Lease Office Equipment Or Should You Purchase It?

Deciding whether to lease office equipment or to purchase it requires you to have adequate knowledge in order to make an informed decision.

lease office equipmentIf you are a start up business, the decisions you make during the initial phases can either increase or decrease the likelihood of long-term success. One of the key decisions that you have to make is whether to lease office equipment or to purchase it. There is some office equipment that you can lease while there is some that would make sense to purchase.

How To Know If You Should Lease Office Equipment Or Purchase It

There are several questions that you need to ask yourself before you lease office equipment. For starters, you should ask yourself if the equipment depreciates or appreciates. As a rule of thumb, you should always lease equipment that depreciates in value; if it appreciates, you should purchase it. Therefore, if you plan to acquire computer equipment, you should consider leasing it rather than purchasing it. This is because computers tend to depreciate once they are sold. However, you can purchase office furniture because it does not depreciate.

When deciding to lease office equipment you have to ask yourself how often you will need to update the equipment. Software is an example of soft equipment that needs to be upgraded every so often. The same applies to photocopiers, printers, scanners and any other piece of equipment that uses constantly changing technology. It is much cheaper to lease office equipment that needs to be upgraded on a regular basis than to actually make a cash purchase on it.

Consider the tax advantages of both methods of acquiring office equipment. Ownership of equipment has great tax advantages. During the first year of purchasing equipment, you can save a considerable amount of taxes. Section 179 of the IRS allows business owners up to $500, 000 as a first year write off. As the equipment loses its value later on, there is always the potential for depreciation deductions. When you choose to lease office equipment on the other hand, the lease payments can reduce taxable income than depreciation expenses can.

How much money does your business currently have to spare? Most start up businesses have limited cash flow and it would not be a good idea to purchase office equipment up front. Therefore, rather than have business capital tied up in equipment, it would be much better to lease office equipment. Leasing allows a business to acquire high quality equipment without paying too much money for it upfront. Moreover, if you do not need the equipment after the lease period expires, you can simply return it. Better yet, you can purchase it at $1, or at fair market price depending on the type of lease agreement that you signed.

Is Leasing Office Equipment Really That Easy Or Is There A Catch?

The process of leasing office equipment is a very easy and fast process. All you have to do is provide necessary information such as bank statements and business information. Once you fill out the necessary paperwork and pay all the appropriate fees, your application will be processed and in most cases, approved within 24 hours.

Speaking of fees, there are some unscrupulous leasing companies that are notorious for asking potential lessees to make down payments before signing the lease. If a lessor tells you such a thing, then you should not do business with them because they are not legit. Any down payments that you make should only be after you have signed the lease. The only other payments you might be asked to make before then are attorney fees, filing fees, etc.


Figuring out the ideal option for acquiring office equipment is a big deal. Typically, you can choose to lease office equipment as well as purchase some items. You can only do this once you understand the basic needs of your company. Ask yourself questions like: “will I have enough money to cover other expenses once I have purchased the equipment?” “Are the advantages of leasing office equipment applicable to my business?” “Will it be cheaper to lease or to purchase the equipment in the long run?” Once you have figured some of the important questions out, you can make your final decision.

For information on should you lease office equipment or purchase it, simply CLICK HERE.