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Buying, Leasing or Borrowing - Which do you choose?

The good news is that you don't have to go out and spend a lot of money to fully equip your home office. Also, you don't need to get everything at once. The key is to schedule your purchases over a period of time and while you are waiting for the day to purchase to arrive, you are giving yourself the time to do the research to find out the best products to buy and the best avenues to pursue.

Let's look at buying!
There are some advantages to buying equipment, as you then have an asset that you can liquidate at a future stage and you can also depreciate that asset, reducing you income from the business. However, once you own the equipment, you also own the maintenance of that equipment and the updating of that equipment as technology advances. Some people are not comfortable with owing money to anyone, so buying will be the best option for them as it gives them peace of mind. The down side of purchasing outright is that it can also tie up your cash and as cash flow is crucial to a business, an untimely purchase could be the difference between floating and sinking. If you are going to buy, make sure you do the research first.

Let's look at leasing!
Some people prefer never to buy a single piece of equipment but rather to lease that equipment from a reputable hire purchase firm. The advantages of hiring equipment is that you can update that equipment at any time and don't have to liquidate your out of date equipment. You simple arrange for an upgraded version of the type of equipment you use and they deliver it and bill you as per your arrangement. Another advantage is that if you don't like the equipment you can always trade it in for a model that you do prefer. This "try before you buy" opportunity could save you dollars in the long run from unwise decisions! My brother-in-law hired all his equipment for his business and then he was able to write off the lease payments against the business income, rather than just depreciating the asset. In the long run, he was much better off as he had the latest technology and the opportunity to greatly decrease his business income, thus reducing his tax debt. The laws in each country are different and you need to thoroughly investigate any lease before signing.

Let's look at borrowing!
Many a small business has started off by borrowing equipment from wherever it is available. It is amazing what you can obtain without outlaying a single dollar if you let your networks know what

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