Lease or Buy?

When facing this question, there are several factors to consider.
1 min read
Opinions expressed by Entrepreneur contributors are their own.

Wondering whether to buy or lease equipment? Visit your accountant for information on current rulings and ask whether any potential leases are suitable for write-offs. Leasing often allows for limited start-up capital to be stretched because it significantly lowers the initial cash outlay. However, if you have a legitimate tax-deductible lease, you don't acquire equity in your equipment and therefore won't build up your balance sheet.

A financial statement that shows a strong net worth is important to any business, especially one that is homebased, because it lends an added degree of legitimacy. In addition, the total cost of leasing over a period of years is higher than if the same items were simply purchased. Consult your accountant about the wiser choice for you.

The tax laws generally make the purchase of equipment, whether new or used, more attractive than leasing. Some financial sources offer no-money-down options for equipment purchases or leases. No-money-down leases enable you to own the equipment when the term of the lease is completed.

Excerpted from Starting a Home-based Business

More from Entrepreneur

One-on-one online sessions with our experts can help you start a business, grow your business, build your brand, fundraise and more.
Book Your Session

In as little as seven months, the Entrepreneur Authors program will turn your ideas and expertise into a professionally presented book.
Apply Now

Are paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.
Get Your Quote Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.