First, let's clear up some misconceptions - if you buy, you are still eligible for a maintenance contract. This and the method of acquiring the new asset are separate options. Secondly, although leasing is the recommended option for most, there are some transactions that make more sense as a simple purchase. Finally, we're here to help you evaluate your options and make the best decision for you and your business.
Buying equipment is easy. Once you decide what you need, you can just go out and buy it. That makes it much easier than leasing which requires paperwork, credit inquiries, lease terms and conditions to review and typically results in more time to complete this process. Although there is a cost to using cash, in the right business, it will be lower than the financing costs associated with a lease.
With a purchase, you control the asset. You want to move it to another location - go ahead, you don't need to notify anybody. After years of good service, if you'd like to retire it to your reception area as a conversation piece or escort it down the stairs after a bad day, you can do as you wish. PS - due to legal and health concerns, the latter resolution is not recommended.
This is a depreciable asset and you're still entitled to deduct at least a portion of the cost in your tax calculations. Your tax advisor can make a recommendation on how this will impact your business.
You've decided to buy it...great! But now you have to come up with all the money. If the initial outlay for needed equipment is more than you have in your account, you may need to tie into your lines of credit. Depending on what your plans were, those funds could be used elsewhere for marketing, advertising or other activities to build your business.
At some point, your equipment is no longer relevant, it's outdated or worse yet, might not even be supported. A growing small business may look to refresh technology as soon as 18 months, most business upgrade 36-48 months after install. When you own the asset, your more tempted to keep it for longer and many keep it well past it's useful time. Understanding what your needs are today, and moving forward is the key to determine what the best course of action will be.
Typically, we'll recommend the purchase option under specific circumstances: