Comparing to the advantages of leasing a computer and disadvantages when you lease a computer, under what circumstances is leasing a computer ideal for a business?
Leasing is considered to be one of the more useful tools in a business owner’s belt, simply because it means they don’t have to pay so much money up front. The basic terms of a lease are that you get equipment loaned out to you for a monthly payment, meaning you can get all of the equipment you could need without having to pay the up-front cost.
This is extremely convenient, especially for businesses starting out, because they don’t have to worry about how they’re going to allocate their already limited capital. When you’re first starting a business, you’re not making money, but you have a large number of expenses to deal with.
From paying rent for your building to paying for utilities, payroll, taxes, stock, and others, it’s tough to scrounge up the money to pay for equipment too. Many business owners like leasing because, in essence, that’s one less thing they have to worry about paying a large sum of money for.
However, leases are not all the same, and whether a lease is ideal or not for your business depends completely on the circumstances.
Computer Equipment Being Used in a Business
An essential piece of technology that almost every business needs is a computer, usually to store records and such but also for more crucial purposes. Computers have become a fairly common technology to the point where just about every household has one, and every business definitely has at least one.
Some businesses do need computers to do more for them than just store records; for example, a restaurant uses computers to store information about what tables are being used at a given time.
Some businesses even completely depend on their computers, like I.T. companies and outsourced bookkeeping businesses, and in those cases they need quite a few computers and good ones as well.
There are quite a few different circumstances for how a business ends up getting a computer and some businesses are newer while others have been around for a bit and need a replacement on their computer technology.
In these cases, it’s ideal to determine the best way to acquire your computer equipment: should you be purchasing or leasing? What are the advantages and disadvantages when you lease a computer versus when you purchase one?
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Process of Buying a Computer
The best way to look at the short and long term effects of buying a computer is to consider what happens when you purchase your personal computer. You pay a relatively large sum of money (usually around $500-$1,000, possibly more depending on quality) to buy your laptop or computer, and from there on, life is simple.
You use the computer as needed, no problem, and time goes on. However, after a few years, you notice the quality of your computer is decreasing, to the point where it’s starting to cause you issues.
It may even break down completely, but either way you hit that point where enough is enough and you purchase a replacement computer. At this point, it’s most likely been 3 to 5 years since you bought the computer, so it’s no real issue: paying that money for well-used equipment every few years is fairly manageable.
However, this changes drastically when you’re running a business, tight on finances for years, and instead of replacing one computer, you’re replacing ten or twenty.
Advantages when Leasing a Computer
The point where businesses end up leasing is usually when they’re dealing with capital equipment: expensive hardware they couldn’t get on their own that will end up needing to be replaced within a few years. With a lease, you get all of the equipment you need at a low flat monthly rate.
This means you’re not worrying about interest rates or large, up-front payments, helping you allocate your funds easily. In addition, leasing offers you advantages like tax benefits, where you can get money in your pocket at the end of every year come tax return time.
If your equipment breaks down during a lease, you also get your equipment repaired without having to worry about paying a large sum of money to get the equipment repaired or replaced. L
easing also offers you upgrade deals throughout the lease or if you continue a lease, meaning you can get the best new technology every so often.
How the Disadvantages when you Lease a Computer Factor into getting a Lease
However, a lease is a contract that is completely dependent on what you need and the leasing company themselves. Some leases are more suitable for older businesses that just want good upgrade/repair deals in their lease, while others are more for businesses that are tight on cash.
Leasing has quite a few factors to it, and you need to make sure that they are all suitable to you before you sign the dotted line. Many a business owner has gotten a lease, only to find that they are paying too much for equipment they don’t need, and they try to get out of the contract only to deal with a high cancellation fee.
Many business owners consider one of the disadvantages when you lease a computer to be the cancellation fee, but this fee is no real issue if you’ve got a good lease. There are both advantages and disadvantages when you lease a computer, and the best way to get only advantages is to make sure the lease is ideal for your business.
In other words, is the contract period too short or long? Is the payment too much? Do you want a better way to get upgrades throughout the lease?
It’s completely up to you, shopping around and finding a good lease is one of the most important steps in getting a lease for your business. To learn more about disadvantages when you lease a computer, click here.