How to Choose Whether a Lease or a Loan Is Right for Your Business?

Deciding whether a loan or a lease is the best choice to get the equipment for your business can be tricky. However, here are some questions you can ask to help you pick the best option for your particular situation.

• Can you afford the 20% upfront deposit or down payment that most equipment loans require? If not, there are very few equipment loan options available and a lease will probably be best.
• Based on your current income and expenses, how much can you afford to pay every month? This will help you narrow down which provider is the better option for your needs.
• How long do you need this equipment for, and when will it wear out or become obsolete? If you only need this piece of equipment for a short period or it will need to be upgraded/replaced in a relatively short period, then an equipment lease is usually the better option.
• Is the focus of your business on growth or profitability right now? If it’s growth, you want to retain capital, so leasing is probably best. If it’s profitability, owning equipment can help lower overall business costs.