As per my work life; I have come across purchasing a business equipment instead of going for lease. The factors that I considered included current cash flow, terms that are flexible, the possibility of upgrading equipment and tax deductible.
When considering the current movement of money, I had to decide while reviewing the money I had at that time. The most critical benefit of leasing a business equipment is that it enables you to obtain assets with the lowest initial expenditures. Since leasing equipment rarely needs a down payment, one can get the goods you require without considerably affecting the current cash that one has (Helmut Kraemer-Elis, 2012). When it comes to flexible returns, leases are usually easier to get, and they contain more flexible terms than acquiring loans for purchasing equipment. This was beneficial to me as I needed to bargain a longer plan for payment to decrease my costs.
Delegate your assignment to our experts and they will do the rest.
When considering the possibility of buying equipment, leasing is favorable as it enables companies to deal with the issue of obsolescence. Since I wanted to obtain equipment that will be outdated in a short time, leasing was the best decision as it passes the responsibility of obsolescence onto the lessor (Arevalo, 2010). As a result, I have the ability to lease a new and better equipment after my contract expires. The decision was made in a formal reporting format. I went to my superiors and explained to them why leasing was better in that situation, and they came up with an official report where I was required to sign. This was the best way to decide. Before deciding, I looked at the pros and cons of purchasing and leasing, and in the end, leasing seemed better. Besides, the company was able to spend less cash on the initial payment. We did not have enough money to buy the equipment. Also, leasing offered flexible terms which were easier for me to bargain the overall costs.
References
Arevalo, O. (2010). Mobile dental units: leasing or buying? A dollar‐cost analysis. Journal of public health dentistry 70.3 (2010): 253-257. , 253-257.
Helmut Kraemer-Eis, a. F. (2012). The importance of leasing for SME finance. EIF Research & Market Analysis , 25-26.
