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Lease vs. Buy: The IT Asset debate

If you run a business, chances are that you rely on IT infrastructure to help you get things done. This usually includes expensive systems and devices, which are often the topic of boardroom debates; such as which brands to invest in and which capabilities to consider. Then there’s the question of whether to lease or buy these assets, which we’ll be discussing below:

Leasing

Paying monthly installments instead of one large capital expense tends to suit businesses which are just starting out. When you’re getting a business up and running, investing in IT equipment can burn through capital that might be required for other areas of the business like premises.

Pros:

  • You can pay smaller installments monthly instead of a large lump sum
  • There are often no upfront deposits required
  • With a monthly payment plan, you will be able to budget efficiently
  • You can upgrade your devices and systems more regularly, much like you would a smartphone
  • Regular upgrades mean that you will be able to perform at your peak, improve productivity and keep up with competitors
  • The company you lease from will be actively involved in maintenance

Cons:

  • You won’t own any assets by the end of your payment terms because you have leased them
  • You are bound to contract terms. Should you wish to end the lease, you will have to pay the cancellation and existing months up front
  • By the time the period is over, you would have spent more than you would have for the assets had you paid outright

Buying

Those who can afford to buy their IT equipment does mean higher CapEx, but lessens monthly business overheads.

Pros:

  • Less financial strain on a monthly basis because the large investment has already been made
  • Your business won’t be held to lease terms, allowing you to change providers and devices as you wish
  • The capital expenditure usually amounts to a lower total than the combined monthly instalments
  • There’s less paperwork, making life far easier
  • You can control your costs upfront

Cons:

  • Your device upgrades might not be as frequent than they are when leasing equipment
  • You will probably have to sell your existing equipment to afford an upgrade
  • The financial outlay for purchasing IT systems in their entirety is substantial. This makes it unaffordable for many small business and start-ups
  • Fewer upgrades mean out-dated equipment that could make processes slower – this may impact your productivity and ability to stay ahead of competitors

Need expert advice? No matter the IT you need to run your business, we’ve always got you covered. For more on what our passionate team of IT specialists could offer you, click here. https://www.conosco.com/what-we-do/it-support/it-infrastructure-asset-management/