Whether buying or leasing makes sense depends on your business needs. When it comes time to acquire new equipment, choosing the right financing option — buying or leasing — can be challenging.
Here’s a quick overview to help you decide:
Leasing
- Finance as much as 100% of the purchase price to help free up cash flow
- No deposit is required, your first payment is applied to the balance with the lease is signed.
- Reduced payments.
- Sales taxes are paid on the lease payments effectively spreading the taxes over the leasing term.
- Lease payments are tax deductible.
- Interest rates are usually fixed over the term of contract.
- At the end of the lease, you can own the equipment with purchase options.
Buying
- There’s no residual value taken into account, so your payments may be higher.
- Typically financing requires a 25% down payment.
- Taxes are paid and financed up front.
- You can expense depreciation and interest.
- If you borrow, your interest rate can be fixed or floating and you may need collateral to secure the loan.
Choosing between buying and leasing depends on your business needs. Talk to your accountant for advice on the best option and its tax benefits.
If you have questions about borrowing for your business, we’re here to help, call our Contact Centre at 1.866.863.6237 and we’ll connect you with an advisor who can help make sense of it all.
Book an appointment today