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If your business isn’t sure whether to buy or lease a photocopier and printer, here at Copyform we’d like to help you by detailing the benefits and drawbacks of both.
The benefits of leasing
You sign a lease for a fixed period of time; choosing the option that makes for the most comfortable leasing arrangement, normally up to 5 years, giving you immediate access to expensive technology.
You pay small fixed monthly payments, an initial security deposit and your first month’s rental fees.
You can accurately plan for lease payments in advance, as they are unaffected by changes in interest rates.
As cash flow can be forecast, the cost of use can be compared with the projected revenue and profits generated by the use of the photocopier/printer.
You can reduce your overall tax bill, as the cost is deductible on a ‘by payment’ basis as a business expense reducing the net cost of leasing the equipment.
A lease will include provisions to upgrade up to a newer model or, when necessary, to one that accommodates the higher volume, speed and features your business requires at the right time, giving you the flexibility to adapt to your business needs thus taking advantage of technological advancements.
Since the latest photocopier and printer machines are multifunctional, it makes sense to be able to upgrade all these products and facilities at the same time rather than having to deal with several out-dated pieces of machinery at different times.
You can let the new equipment provide you with a return. The reason for a new photocopier or printer is to increase productivity; with leasing, you are in the position to use the cost saving and increased production ROI to make the periodic payments.
At the end of the lease agreement, the option exists to buy the machine at its Fair Market Value at that time, whose appraisal of its FMV is determined by the leasor.
Leasing companies generally provide technical support for the products they lease, and as such support may cost you no additional money out of your pocket.
While the benefits of leasing a printer/copier are quite substantial, the process has its fair share of disadvantages as well.
The drawbacks of leasing
In the long run, your business will end up paying more than what the printer/copier was actually worth at the time of purchase. Certain lease contracts have lock-in periods, which means that you have no option to discontinue the lease if your needs change.
In fact, you would be required to pay for the lease period, irrespective of whether you are using the leased printer or not. In addition, in terms of technological upgrades, you may not be in a position to decide which equipment you get.
The benefits of buying
The purchase of your printer makes it tax deductible, you will be able to claim 40% of the photocopier/printer purchase price against tax in the first year and thereafter claim 25% of the outstanding balance.
You decide how often to maintain your printer. This is an advantage because many printer lease contracts have stipulations concerning the frequency with which the printer needs to be maintained.
The tax deductions tend to be more significant if you purchase the equipment.
The drawbacks of buying
Buying a printer, however, will require that you pay for your own repairs and rely on the manufacturer for technical support, which can prove to be expensive if you have to buy additional parts. The cost of printer ink may also add up fairly quickly, whereas a leasing company may replace ink for you as needed.
Furthermore, the fact that the equipment depreciates in value and becomes obsolete makes leasing the more sensible option. The most important drawback is buying your equipment requires a significant upfront capital outlay.
There you have it! The best way to decide between these two dilemmas is to balance these advantages and disadvantages with your specific business requirements and your financial capabilities. If your business is looking to buy or lease, Copyform has a wide range of printers and photocopiers to suit every budget.
