If you are a business owner or have buying influence in one, you have considered whether or not to purchase a copier or to enter into a lease. Based on your business structure, you will find there are pros and cons to both options.
Purchasing a copier outright is cheaper in the long run. You can avoid paying finance charges, document fees, and administrative fees. For newer businesses who are still establishing their credit, you can also avoid a credit check and the need for credit approval from the leasing companies.
Technology is rapidly changing and always evolving. In 5 years, your copier’s technology will be out of date and will have lost its value for resale. The substantial investment may make you hesitant to upgrade as technology calls for it. It will also begin to cost you additional money for service as the parts age and wear.
Companies that choose to lease are able to establish monthly payments. This makes budgeting for a new machine a lot easier. You will know what your payment is every month, barring any overages. At the end of the lease, you have the ability to upgrade your copier for a newer model with technology that is up to date.
Total cost for the copier is more than buying outright and you are obligated for all payments through the end of the lease. This may cause an issue for some businesses who no longer need the copier or wind up going out of business.
In summary, if you have the available cash flow, purchasing your copier outright is financially beneficial. If not, or you prefer to make monthly payments to allow for budget optimization, you should opt for leasing. When leasing, you should be aware that there are different lease options. An operating lease, also known as a fair market value lease, is a great option if you want to lease a machine and have the ability to upgrade into the newest technology. A capital lease, also known as a $1 out lease, lets you own the equipment after the lease is over. Be aware that with a capital lease you will pay a higher interest rate on your machine. This type of lease would apply if you are interested in owning your machine but do not have the capital to pay for it upfront.
Ford Business Machines can help you strategize and calculate the best lease or purchase option to optimize your business structure. For a further analysis, call 800.633.3673.