With the economy experiencing continuous growth over the years, more and more business owners are now turning to capital investments in order to speed up their businesss growth. This focus on capital investment therefore leads to decisions to acquire equipment for the company. However, there are some companies that opt to lease instead of buy new equipment, for a lot of different reasons.
The question of whether a company should buy or loan equipment has its own merits and demerits. If you are, however, thinking of making an equipment finance loan over a purchase, you should first think about the following considerations first:
– How long will you need the equipment? The question of whether to make an equipment finance loan or purchase depends on how long you will need the equipment. If you are going to be using the equipment for less than twenty four months, then a loan would be the obviously better choice to make. However, if you plan on using the equipment for a long time, it would be better if you consider purchasing.
– Is there a chance that the equipment will become obsolete while you are using it? Technology is a fast moving force, and there will come a time in the future when the technology that we have right now will become outdated. The equipment that you have purchased might be deemed replaceable with another equipment in the near future, so consider that first when thinking of whether you should buy or loan.
– How much are you willing to spend on it? Just like with any other expense, regardless if you plan on an equipment finance loan or a purchase, you should consider how much money you are actually willing and are able to invest in it.
– Is the equipment only to be used for a specific contract, or can it also be used for other company projects? The goal of purchasing new equipment is to improve production and increase revenue. If the equipment can be used for more than one operation, then it would be a great idea to purchase than loan.
For small businesses thinking of loaning or purchasing new equipment, money management should be taken seriously. Companies such as Mangomoney would be able to help you and your company manage your finances better, all without having to spend much, while at the same time, giving you more time to consider other pressing matters.