Should Your Business Buy or Lease Computer Hardware?
For your IT department, buying computer hardware outright can be an extremely expensive capital outlay, especially for cash-strapped startups and small businesses looking to build a product first, reap the rewards later. For such businesses, it may make sense to lease your laptops and electronics instead of purchasing. Even for larger, more established companies, leasing has many benefits over buying that may prove appealing, though it also has its disadvantages. Hence, should your business buy or lease computer hardware? That’s the question we’ll explore.
Leasing constitutes signing a contract for X number of equipment (such as laptops) for Y number of months with a manufacturer. At the end of the term, your business must return the equipment with only natural wear and tear (excessive damage will be billed). Dell, for example, provides leasing through the Dell Business Lease program. Click here for an example on how leasing works.
Buying is quite simply, well, buying. Your business negotiates a deal with a manufacturer (such as Apple) for Z number of devices. Once the deal is signed and the transactions are complete, the devices are shipped to you and are now completely and permanently owned by your business.
Buy or Lease Computer Hardware?
Now that we’ve got our definitions squared away, take a look at the infographic below that summarizes some of the differences between leasing and buying computer hardware. Want the quick summary? Basically, your decision should depend on your business’ current situation in terms of resources. Have money and capital on hand? Then definitely go ahead and buy hardware, because it will save you in the long run (financially). Cash-strapped but need more equipment to build a product? Leasing will get you the hardware without initial expenditures. Of course, the differences are much more subtle than that; each option has different headaches along different points in the process.