Take a minute to ask yourself some basic questions. Are you seeing growth in your industry? Is your industry becoming more competitive? Is quality a high priority? If you answered “yes” to any of these then you may want to consider a lease. Leasing will provide the flexibility required to grow with your business and upgrade to more productive technology when you need it. Leasing also provides a quick way to acquire the equipment necessary for business with small manageable payments all while building credit, not to mention certain tax benefits.

Know the difference between a Fair Market Value lease or “FMV” and a Dollar Buyout Lease or $1.00 b/o.

With most good leases you will have the option to buy the equipment at the end of the lease term or after the maturity date has passed. Usually there is a cost to do so, called the fair market value. With a $1.00 buyout, you pay a higher monthly payment so that at the end of the term the transfer of ownership is shown with the payment of just one dollar. Your best bet is to do a $1.00 buyout with shorter term leases and a “FMV” lease with longer term leases. This is in part because after a long term lease (48-63 months), the equipment is now considered aged; why would you want to pay to own it? A $1.00 b/o on a 12-39 month lease still leaves enough life in the machine to justify paying the higher monthly amount during the lease term but to continue owning it without payments for a few more years.

Now, a look at purchasing.

The obvious advantage here is avoiding term obligations. You may rid yourself of any month-to-month lease payments, but most copy and print equipment need to be serviced regularly. It is very wise to obtain a service agreement on your equipment, but that will bring you back to a reoccurring payment, making the idea of eliminating ongoing costs moot. A better argument for purchasing is avoiding interest. Cash is king, and if you can purchase without interest you can save that money for other aspects of your business.

Beware, the common purchasing pitfall.

The temptation with purchasing equipment, however, is holding on to it for too long! The older the equipment the more money you will have to invest in it and the less efficient and reliable it becomes. Pretty soon you will be using the money you saved from not paying interest to paying for service to keep your equipment running. I always explain to my customers that efficiency and cost savings are absolutely good goals to have, but reliability is the key. Any money saved is almost always lost if the equipment is not reliable.

Another issue with purchasing is the loss of flexibility. Many vendors are unable to “buy back” used equipment. Manufacturers may offer incentives to do some type of a “trade in,” but this can be hit or miss. I have seen businesses purchase equipment only to have their needs change. As the value of equipment typically depreciates if you try to sell it yourself, you could end up taking a loss.

To Lease or Not to Lease: Final Thoughts

Leasing provides an avenue to keeping equipment relevant. Newer equipment will boost morale and productivity for the end users. The best thing to do is work with a company you trust. Ask for references and check out their reviews online. Do your homework when seeking out a vendor, and be sure to look at more than just the price tag.[/cz_title][cz_gap height=”30px” id=”cz_62034″]

Why You Might Want to Lease Your Office Equipment:

#1 KEEP YOUR TECHNOLOGY CURRENT

Technology changes at an astounding rate. Even in the course of just one year, a piece of technology you purchase could go from being cutting-edge to obsolete. That being said, technology has never been a more important part of an efficient business. The many advances in business technologies have allowed us all to do more with less. That’s why businesses can’t afford to be left behind by being stuck with old, outdated technology. From your computers to the software you use to your copiers and printers – your technology can become outdated every 3-5 years, slowly dulling your competitive edge. When you lease your office equipment, you have the opportunity to upgrade and refresh your technology on a regular basis, making you more nimble and productive year by year.

#2 PAY NOTHING UPFRONT

This is a big one. Everyone knows the old saying “You have to spend money to make money.” While this is true, it’s also important to keep money in your business’s bank account. Leasing your office equipment can mean the difference between making thousands of dollars from your pocket to invest in equipment that will soon become outdated OR getting the equipment you need and paying a low monthly price. This means that more of your capital is available to help cover other business expenses, especially the unexpected ones.

#3 PREDICTABLE MONTHLY EXPENSES

Which brings us to #3. When leasing your equipment and paying a monthly price, your expenses become much more predictable. When you purchase the equipment outright, the cost of the equipment is only part of the total cost of ownership. Things like maintenance, repair, and consumable supplies need to be considered as well. Many times the cost of things like service and supplies are built into the monthly cost of the equipment lease for a certain amount of time or a certain number of pages so that you don’t have to pay on an as-needed basis during that time.

#4 GET NEWER, MORE SOPHISTICATED TECHNOLOGY

It’s true what they say, you get what you pay for. That can be a struggle for some businesses, especially those that are small or just starting out. In a lot of cases, business owners have to make a choice between having the best technology for the job or having the technology they can afford. Sometimes the cheaper option can hold you back from making good progress or getting your work done with less error and in less time. When you lease your equipment, you have more freedom to choose more productive, more sophisticated technology because you don’t have to come up with all of the money at once.

#5 IF YOU LIKE IT, YOU CAN PURCHASE IT

Good news, if you get to the end of your lease and you decide you love your equipment and don’t want to upgrade it, you can purchase it! Usually, you can purchase it for a very good price. Many businesses that lease equipment will purchase the end-of-lease equipment in addition to leasing new equipment. This is a great way to purchase the equipment you know you like very inexpensively while adding newer, more efficient equipment for your collection. This is an especially good option if you are consistently growing and need more equipment than you did before.

Les Olson Company offers a variety of business products that can help make your office workflow more efficient including Sharp Copiers and Digital Presentation Boards, HP Printers, Document Management Software and much more. We are also proud to be able to offer our customers the option to lease their equipment through our in-house leasing company, Revco Leasing.

Benefits of Leasing Through Revco

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