When it comes to owning a restoration company, or any company for that matter, the financial side can get to be pretty expensive. There are a lot of decisions to be made, budgets to set, and costs to cut. Leasing versus buying the proper equipment to keep your business running can be a difficult decision to make because it fits in all three categories listed above. Knowing your options and both sides to the argument will help make this decision a little easier, and we are here to help YOU. Here are some pros and cons when it comes to buying and leasing equipment:
• This method is good for equipment that needs to be updated often because you can acquire updated technology easier and quicker. If you will need to update your equipment on an annual basis to remain competitive, leasing allows you to avoid being stuck with outdated equipment.
• There is less expense up-front with leasing because you have easy, predictable payments. You don’t have to deal with one large lump sum to purchase what you need, making it easier to budget for the equipment over a longer period of time.
• Leasing is often 100% tax-deductible as an operational expense under the 179 IRS Tax Code.
• Leasing is flexible and offers more options when it comes to the type of equipment you get. You aren’t as restricted by high up-front costs or other hesitations to try something new that may help your business.
• With leasing, you don’t pay for maintenance. If something breaks or has issues due to normal wear and tear, the leasing company is in charge of fixing the equipment.
• Owning a business can get pretty pricey. Leasing equipment allows for budgeting and puts money into other things as opposed to paying a hefty bill and having nothing left over.
• Since you don’t own the equipment, it gives you absolutely no equity. You won’t have the option to sell the equipment once you are finished with it.
• The available length of lease terms may be longer than you need.
• Availability of products may be limited depending on the stock of the leasing company. Your choice of brands or models could potentially be out of stock or not carried at all, so you could have to settle for something else.
• You will own the equipment, so you can make any alterations necessary
• You have the option to sell the equipment when you are finished with it.
• You don’t have to deal with agreements and contracts. You simply pick out what you need and pay for it.
• If you want a particular model or brand, you have the ability to order exactly that.
• You will have a higher initial cost as opposed to lower monthly payments that may be easier to budget. It may be difficult to pay for costly equipment all at once. Higher initial costs may keep you from buying exactly what you want and may force you to settle for a lower-cost option.
• For a technology that is outdated quickly, you are stuck with it because you own it. You then have to decide if it is worth it to continue to use it, repair it, store it or sell it.
• You are responsible for all maintenance, including costs. This can get pricey depending on what issues you encounter, and making repairs is not always simple. You could potentially be burdened with broken equipment that you can’t return or sell. Keep an eye on the product warranty to see if it covers repairs and for how long.
Fortunately, the decision doesn’t have to completely be on you. Like we said, we are here to help! At Viking Financial, we know what it takes to keep a restoration company up and running for a long time.