Leasing Office Equipment: What Every Business Should Know

What is Office Equipment Leasing?

Leasing office equipment is a financing arrangement in which a company, lender, or vendor allows you to use the equipment for a specified period in exchange for monthly payments. Once the period ends, the lease is over, and you may return the equipment, unless you have and accept an option to either renew the lease or buy the equipment. 

The primary difference between renting and leasing equipment lies in the cost and flexibility. Renting equipment tends to be more expensive in the long-term, but has more flexibility than leasing, but leasing is less expensive and stricter. Rentals, unlike leases, also do not build equity on the device, meaning that your company would not have the option to keep the machine once the agreed period is over. 

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How Office Equipment Leasing Works

What can you expect when leasing office equipment? Let’s talk through that process. 

• Identify: What your organization’s equipment needs are. 

• Research: Find and get quotes from reputable suppliers. 

• Evaluate: Carefully consider and understand quotes. Ask follow-up questions and negotiate as needed. 

• Decide: Select the lease agreement that offers the best deal and fulfills your identified needs. 

Let’s also quickly touch on end-of-lease options. There are three common types: 

• Fair Market Value Lease (FMV): At the end of the lease, businesses can buy the equipment at its Fair Market Value, return it, or upgrade to new equipment. This type also typically has lower monthly payments compared to other leases. 

• Hardware as a Service (HaaS): Similar to an FMV, but there is no option to buy. This is best suited for businesses planning to upgrade or replace the equipment. 

• $1 Buyout Lease: The customer owns the equipment at the end of the lease for the price of $1. 

Benefits of Leasing Office Equipment

With this understanding of leasing, why should small-to-medium-sized businesses consider leasing office equipment? Let’s identify some benefits to consider: 

• Financial Flexibility and Budgeting: Leasing is a great alternative to avoid the daunting upfront costs of buying office equipment. Additionally, leasing agreements often have no or a small down payment. The monthly payments are also typically lower than purchase installments. 

• Access to the Latest Equipment and Technology: It is easier to upgrade a leased piece of equipment than a purchased piece. Leasing terms can also be as short as six months, which can allow for easy access to upgraded technology. 

• Tax Advantages: Monthly payments on leased office equipment can often be deducted as rent when filing taxes. 

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Leasing vs Buying Office Equipment

What else is there to know between leasing and buying equipment? Let’s directly compare these two options. 

• Short-Term and Long-Term Financial Implications: Buying equipment has higher upfront costs and short-term costs than leasing. Leasing, though, often has higher long-term costs than buying. 

• Total Cost: Leasing often has a higher overall cost when compared to buying equipment. 

• Equipment Obsolescence and Upgrades: When you buy equipment, you may be more likely to want to keep it long-term and make the most of your investment. However, as technology is constantly evolving, focusing on more short-term usage of leased office equipment can help a business upgrade to current technology. 

Why Choose Quality Digital Office Solutions for Equipment Leasing

When finding a potential supply partner in Central Pennsylvania and Northern Maryland, look no further than QualityDOS! Our leasing services come in addition to our award-winning customer service, our commitment to our community’s businesses of all shapes and sizes and finding tailored solutions to support business’ needs. 

Getting Started with Leasing

We know that sorting out office equipment can be stressful, and that’s why we are here to help find solutions for your organization. Are you ready to lease office equipment for your business? If you are, or if you have questions, contact us today for a personalized consultation!