Updated: Jul 14, 2020
With pros and cons to both renting and buying, it pays to evaluate your company’s current situation and capabilities (financial and otherwise), your future plans, and carefully consider which method of acquiring equipment will be most advantageous to your business – and which is also simply going to make your life easier. Certainly, the initial cost is a major factor in the decision process, but it’s not the only one – there are several things to consider when it’s time to gear up – usage, availability and more.
The Business Current Financial Position
Does the business have the capital to buy or is renting a better option for now? Any business should look deeper than the current situation and project the costs over several months or years. Although buying may be a larger one-time financial outlay, the cost of renting can add up quickly, and over a long period of time can end up costing you more – especially if the equipment isn’t being used for the entire rental period. And don’t forget: when you own, you can see a return on your investment when you sell. Depreciation plays a role and a client must consult his auditor or accountant to provide the business with the best advice for the business at the said time.
You can reduce the initial financial impact of buying a piece of equipment in many different ways: