Why Would Companies Choose to Lease Rather Than Buy a Copier?

Leasing a copier offers many advantages, such as:

  • Easier Budgeting
    You know how much you will be paying each month.
  • Tax Efficient
    If you pay corporation tax, copier lease payments may be deducted from taxable profits, which reduces the net cost of leasing the equipment.
  • Convenience
    Making copier lease payments by direct debit helps you avoid unnecessary time organizing payment for equipment rental invoices.
  • Conservation of Capital
    Your money is not tied up in equipment costs and can be invested in other ways.
  • Obsolete Protection
    When it’s time for your lease to expire, you may choose to keep your equipment or upgrade to new equipment.

 

There are two (2) types of leasing option:

  1. Fair Market Value (FMV) lease
  2. $1 Buyout Lease

To make the best decision for a leasing option for you or your company, here is what you need to know:

Fair Market Value Lease

A Fair Market Value lease, also known as an operating lease, allows you, the lessee to use the equipment for a pre-arranged time period for a fixed monthly payment. At the end of the lease term, you have the option to purchase the equipment at its determined Fair Market Value, return the equipment, or upgrade to a newer version of the equipment.

  • FMVs are often the most affordable leases.
  • FMV leases are often used when the company does not want to retain the equipment at the end of the lease term.
  • FMV leases help manage the cost of continuous upgrades and can prevent inefficiencies and maintenance issues related to aging and outdated technology equipment.
  • FMV leases feature a fixed monthly payment.
  • Since the lessee does not own the equipment it does not appear on the company’s balance sheet, allowing the lessee to deduct the monthly lease payments as an operating expense.

$1 Buyout Lease

A $1 Buyout Lease, also called a capital lease, is similar to purchasing equipment with a loan. There is a higher monthly payment compared with an FMV lease, but at the end of the lease term, you purchase the equipment for $1. Since it is very similar to taking out a loan on the equipment, this type of lease is often used when a business plans to keep the equipment for a long period of time.

  • $1 Buyout Leases have a set lease term
  • Fixed monthly payments
  • Equipment ownership is often transferred to the lessee, and the equipment appears on the balance sheet as company assets.
  • At the end of the lease term, the lessee purchases the equipment for $1.

Hopefully this post cleared up any confusion about Why Would Companies Choose to Lease Rather Than Buy a Copier?

We offer both Fair Market Value and $1 Buyout leases and can help you determine the best equipment lease/finance solution for your business – and make the process easy for you!

 

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