Whenever a company wants to acquire new equipment, they need to make a strategic business decision. It’s common for small businesses to put their plans to grow on hold, as they cannot afford to spend money on newer (or additional) office equipment. Under these circumstances, the company can opt to lease office equipment from a leasing company. Although it has some benefits, there are some other things to consider before making the final decision.
Many organizations already have an office printer lease, as it removes the hassles and overheads of maintaining their printer and ensures they have the necessary supplies onsite. By leasing other office equipment, it’s also possible for the organization to achieve greater efficiencies, reduce operating costs, and upgrade their equipment regularly. Here, we look at the benefits small businesses in Canada get when they lease office equipment.
Advantages for Small Business in Canada who Lease Office Equipment
Before discussing the benefits of leasing, companies should know what other options are also available. Firstly, the company can opt to purchase their equipment outright. This will require large capital investments for the equipment, but the company could have to compromise based on what they can afford. If their cash flow doesn’t allow them to buy the equipment, they may decide to get an equipment loan to make up the shortfall. There are drawbacks to both of these options, but companies will have to analyze their needs and decide which option suits them best.
Equipment loans for small businesses may be appealing, but the loans could have higher interest rates and the repayment terms are usually more expensive than a lease. Similarly, using up money in the budget to invest in equipment upgrades can put the financial stability of the company at risk. Even if the company has surplus funds available, it may still be a better option for them to lease office equipment in the long term.
Understanding the Details of Leasing Office Equipment
Leasing provides a flexible alternative to buying new office equipment. There are flexible options available and the leasing company will work with the company to find a financial agreement that serves their needs. The company will also have to decide on which type of lease agreement they want, as the lease term will have certain conditions that apply at the end of the term.
The type of lease the company needs will depend on how they want to proceed after the agreement expires. If the organization wants to own the equipment, they’ll need a Capital Lease. This agreement may be more expensive at first, and the company will have to settle the term with an additional payment. An Operating Lease or Fair Market Value Lease will cost less than a Capital Lease, but this means the company will not own the equipment after the lease expires. Once the term ends, the company can return the equipment or decide to renew the lease. Operating Leases are perfect for small businesses that require regular upgrades of their office technologies.
Tangible Benefits of Leasing the Company’s Office Equipment
As alluded to previously, the biggest benefit of leasing equipment is the consistency in the budget for office technologies. With a leasing agreement, the organization will know what their yearly budget for office equipment will be upfront. It also means that if anything breaks, the company won’t be liable and won’t incur any expensive replacement or repair costs. This frees up cash flow to spend on more strategic initiatives in the business.
This also provides small businesses in Canada with peace of mind, as the equipment and devices will operate more reliably because regular maintenance will form part of the agreement. With reliable equipment, the company will improve its efficiency and be more productive while executing their daily workflows. The leasing company will usually provide dedicated support from a team of IT professionals, helping them resolve any issues quickly.
Some other benefits include:
- Access to Newer Technologies – A lease agreement will allow the company to upgrade its office equipment regularly with the latest technologies. As digital solutions continue to improve the way companies do business, access to the latest devices and network technologies enables the organization to remain competitive in a rapidly changing business landscape.
- Reduced Tax Burdens – When a company chooses to lease office equipment, they gain additional tax benefits as the lease amount counts towards their deductibles. Leased equipment does not count as a depreciating asset; therefore, the company can write off the total cost of the lease during the tax season.
Lease Office Equipment from First Phase Data for Your Small Business in Canada
Since 1983, First Phase Data has served small businesses in Canada with their technology needs. As a digital solution partner, First Phase Data will ensure the organization gains access to office productivity tools that drive both growth and efficiency in the company. With the right tools, the employees and staff are free to focus on the business’s core tasks, instead of struggling with faulty or outdated office equipment.
To start discussing what agreement will ensure you can lease the office equipment your small business in Canada needs to stay productive, get in touch with First Phase Data today.
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