When your business requires new plant or equipment, should you buy or lease?
The right choice depends on your specific circumstances, but understanding the key factors can help you make an informed decision. Here are some essential considerations to weigh your options effectively.
Buying provides certainty and full ownership, allowing unrestricted use throughout its lifetime. While the upfront cost is higher, the total expenditure is typically lower than leasing. Ownership also enables modifications to suit your business needs and the flexibility to sell the asset if cash flow requires it. Additionally, there are no ongoing payments and you may benefit from tax depreciation.
For equipment with long-term usability and strong resale value, buying can be a cost-effective choice, offering greater financial stability and control over the asset.
Leasing offers greater flexibility but comes at a higher overall cost. It allows you to spread payments over time, avoiding the need for large upfront capital or financing. This can be beneficial for cash flow, as you can allocate funds to other areas of your business.
A key advantage of leasing is the ability to return or upgrade equipment as needed, making it ideal for rapidly evolving technology or uncertain long-term requirements. While leasing typically costs more over the item's lifetime, it provides adaptability and preserves liquidity for other investments.
Investing in new plant or equipment is a big decision, but we can help. We take a proactive approach assessing both upfront and ongoing costs alongside the potential benefits to your business. We’ll factor in your cash flow, borrowing options and sales projections to ensure you make a smart, strategic choice that supports your long-term goals.
Let’s talk—book a consultation call on the button below. We’re here to help you make the right move for your business.