When you decide to put up a business with high printing and copying demand, you will need to invest in good quality equipment. Many people think that investing in a piece of new equipment like a photocopier is very expensive. But did you know that aside from purchasing a brand new photocopier, you also have the options to either rent one or lease one? You might wonder how renting and leasing a photocopier work and which of them is a better choice. Well, today, we are going to help you compare the two options so you can decide which will work best for you.
Leasing a Photocopier
When you lease something, there will be a lease agreement where you will agree to pay a monthly fee for a specific period of time. With this agreement, the lessor covers the repairs and maintenance expenses. If you have saved money to buy a brand new machine, you can just use that for other purposes when you choose to lease a photocopier.
Copier lease will give you an extended payment option with flexible payment terms. There are also no capital payments and there’s no need to pay the cost of the photocopier upfront. When leasing a photocopier, you can choose anywhere from 12 to 64 months of lease. This payment structure will allow you to manage your funds easily while being 100 percent tax-deductible. At the end of the copier lease agreement, you will have the option to buy the machine at its Fair Market Value or FMV at that time.
Through copier lease, you will be able to avoid using up your capital unnecessarily and instead use it to invest in more beneficial projects. Leasing a photocopier is also tax efficient. If you are paying corporation tax, your lease payments may be withheld from your taxable profits, reducing the net cost of leasing your equipment. It’s because when you choose a copier lease, you don’t have to pay the cost of the equipment immediately so you can get back everything you pay on a cash basis which is either monthly, quarterly, or yearly.
Leasing a photocopier sounds good, however, it has some disadvantages as well. First is you may need to sign a 3-year up to a 5-year copier lease agreement. Then, you may be charged a substantial fee in case you want to change your equipment or terminate the contract. Also, leasing agreements are not very flexible. And if ever your business or company closed or there’s a need for you to upgrade your machine, you may be held back with the lease payments until you finish the contract.
Renting a Photocopier
Renting is a bit similar to leasing but it is more flexible. The main difference between renting a photocopier and leasing one is the time frame involved. Copier rental is typically on a month to month basis and you can choose to upgrade or downgrade your equipment when needed. Aside from that, in a copier rental, you will be able to cancel the agreement as long as you give notice ahead of time which is usually 30 days. This is actually great because the latest photocopier you can find today may become obsolete the following year with the advances in technology. By renting a photocopier, you will be able to upgrade your machine without buying a new one. Unlike when you own one, you can only upgrade it by disposing it or reinvesting your existing asset.
Rental agreements cover service as well as parts and supplies. It means that there are also no unexpected repair costs. There are also some contracts that cover toner replacement which is a great deal. By renting a photocopier, you will be able to order the latest model without worrying about the price. It is a great choice for new businesses, especially those with limited capital because they will be able to have the equipment needed to fulfill their daily tasks.
One disadvantage of copier rental is it can be more expensive over time compared to buying a good model outright. Also, the payment terms of renting a photocopier are higher than leasing because the agreement is shorter. But even though it can be more expensive, if you are not sure that you will be able to use a brand new machine for a long time, then renting is a good option.
Should You Rent or Lease a Photocopier?
This is a tough question to answer and it actually depends on you. If you are confident that you can pay the monthly lease fee on time every month for the entire duration of the copier lease agreement, then leasing a photocopier is a good option for you, especially when you are trying to save your capital. But if you only need a photocopier for a short amount of time, then a copier rental is great for you. Renting a photocopier is popular for companies and businesses that work on a project basis.
Both copier lease and copier rental are great options compared to buying a new photocopier. You just need to determine how long you will need a photocopier for you to be able to know which option is the best for you.