Unpacking some advantages for your business.
Do you look after your stuff? Do you like using the latest and greatest technology? Are you torn between champagne taste and a beer budget? Have you ever bought equipment for your business that became obsolete before you’d paid off the credit card bill?
If you answered ‘yes’ to most of these questions, then leasing could be a great option for your business.
Leasing small equipment makes sense
Typically businesses lease all kinds of equipment, from cars to machinery, office furniture to overhead projection systems and TV monitors for reception. The list of options is endless.
But with technology advancing at the rate it is, leasing small equipment like laptops, smart-phones and tablets could make even more sense. You can upgrade regularly to keep up with technological advancements without the heavy outlay.
If you’re running a digital design studio for example, you’ll potentially need laptops and software that will be up to the task.
Another advantage is that you can access equipment you only need short term, again, without the hefty upfront costs.
Leasing’s financial advantages
Business leasing can provide the equipment you need, when you need it, without increasing your business borrowing. Lease repayments are ‘off the balance sheet’, so your bottom line stays healthy in the event you need to increase your business borrowing, for something like expansion.
Lease payments can be taxdeductable when the equipment is used exclusively for the business. If your equipment is for combined business and personal use, you may be able to claim a percentage deduction, but this is something you’ll need an accountant to guide you on.
Either way, leasing is arguably less complicated, come tax time, than calculating depreciation (devaluation over time) and interest claims on equipment you’ve purchased.
Is leasing right for you and your business?
Taking all of the above into consideration, you should also look into how useful and necessary the equipment will be to your business.
Tempting as it may be, your equipment leasing bucket-list shouldn’t resemble something you’d mail to the North Pole before Christmas.
It makes good business sense to look at the overall leasing costs versus your potential return on that investment.
Keep in mind also that leased small equipment, especially electronics, need to be retuned in good working order when you upgrade or end the lease.
So if you can’t seem to keep your smart phone out of the toilet bowl or you keep leaving tablets and laptops in taxis then leasing is possibly not for you.
If that’s the case, perhaps buy your equipment up front and invest in a good insurance policy.
Find out more about our My Plan Business Flex plans and pricing here.
Please note: The information contained in this article is general in nature and does not take into account an individual’s personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.