Should Your Business Buy or Rent?
Businesses often require a great deal of equipment and assets to operate. Whether electrical, mechanical or legal documentation, payment processing devices like the best credit card readers, equipment and other assets can determine if your business is a success or failure. When it comes to acquiring assets as a business and running your business, you need to consider whether you want to own or rent and outsource certain processes. This article will lay out some advantages and disadvantages for purchasing and leasing the equipment your business needs.
What Is an Asset?
There are two types of assets your company might acquire. These are intangible assets like domain names, permits and intellectual property, and tangible assets like the best credit card readers, forklifts and product inventory. Anything that your business needs to operate can be considered an asset.
Should You Buy?
If you choose to buy and own assets for your business, there are several advantages. In the long run, you will probably spend less on buying compared to leasing. Buying equipment outright is also wise if it has long-term value and requires very little maintenance. Assets that you own can be claimed as tax write-offs, saving your company money in the long run.
Renting equipment and other assets should not be discounted, however. The amount of capital required to buy specific equipment might be better used in other areas before you commit to purchasing an asset. If you do not have a lot of liquid credit, you may not want to spend all of it on expensive equipment and instead make smaller payments by leasing. You might want to lease equipment that quickly becomes outdated. Sometimes it’s cheaper to rent equipment instead of replacing it every year.
Physical and virtual assets are an essential part of any business. The nature in which you acquire them can save you significant amounts of capital. Buying and renting have their unique advantages, so consider your options carefully and do what makes the most sense for your enterprise.