The Pros and Cons of Leasing Your Computer Equipment

Choosing between purchasing or leasing your business’ computer equipment is an important decision.  

Both are equally popular options. However, they carry different benefits, as well as disadvantages.   

In this blog post, we explore the pros and cons of leasing your computer equipment, providing you with better insight to make a more informed decision for your business.  

The Benefits of Leasing Your Computer Equipment 

Reduced (Often No) Upfront Cost 

Computers and technology can be expensive, and if you have a lot of equipment to purchase at once, it can quickly get very costly. 

However, leasing computer equipment doesn’t require a large financial investment and can reduce the stress on your cash flow and the requirement to take out credit/overdrafts.  In most cases, there’s no upfront payment required whatsoever, and payments start 1-3 months after receiving the equipment.  

Predictable Budgeting 

On the topic of finances, leasing your equipment can make budgeting easier and more predictable, with monthly or quarterly predictable payments which remain the same for the duration of the lease agreement.  

Up to Date Equipment 

Leasing also makes it easier for businesses to access the latest and most up-to-date equipment without being limited by available cash.  

In addition, leasing helps businesses to avoid the pitfalls of owning outdated equipment and depreciating assets by routinely upgrading and replacing kit at the end of the initial lease period.  

Tax Deductions 

Leased equipment payments can usually be deducted as a business expense, providing potential tax benefits.  

It’s always best to consult with your accountant for the most recent information.  

Flexibility 

Many lease agreements have flexible terms, enabling you to upgrade your equipment part-way through. They also make it easy to add extra devices and accessories, as and when you need them.  

This flexible approach is great for businesses with growing (and unpredictable) needs.  

The Disadvantages of Leasing Your Computer Equipment 

Higher Long-Term Costs & No Ownership 

Leasing equipment often comes with higher long-term costs than purchasing the equipment outright, simply down to the interest you pay on the credit.  

In addition, you won’t own the equipment at the end of your lease, meaning that you have no asset to show for your payments.  

However, many lease agreements, including the ones Systemagic recommend, have an ‘option to buy’ at the end of the term.  

Contractual Obligations 

Lease agreements are often agreed over a fixed period, which means if you need to cancel for any reason, you may have to pay an early cancellation fee.  

Complexity in Managing Leases 

Keeping track of multiple leases and their terms can be complex and time-consuming.  

Although, leasing through your IT provider (such as Systemagic) can take this burden off you.  

Is Leasing Right For You? 

We hope that this blog post has provided you with enough information to decide whether leasing computer equipment is the right decision for your business. 

We’re pleased to offer a managed leasing service to our customers. As part of the service, we manage all associated paperwork and admin, taking the stress away from you. 

To learn more about our leased equipment service, click here. 

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