To Rent, To Lease, or To Purchase Copier Equipment?
Knowing whether to rent, lease, or purchase photocopier equipment can be quite difficult if you’re unsure of what each of these three options actually entails. Each option has its own benefits and drawbacks, being better suited for different types of operations based on aspects like the business’ size, budgeting concerns, and printing requirements.
Copier Rental
Copier rental is the shortest-term, lowest commitment option. It is best suited for smaller-scale businesses or those with temporary printing requirements. Rental agreements are typically on a shorter-term, rolling basis, lasting anywhere from one single day up to several months.
Pros of Copier Rental
- No Fixed Term: When you rent copier equipment, your rental agreement will run on a rolling, month-to-month basis. Unlike leasing, a rental agreement does not involve a fixed term.
- No Tied-Up Capital: The low upfront costs required to rent copier equipment means you have more free capital than if you were to purchase the equipment outright.
- Better Budgeting: Rental payments are spread out across a schedule of small monthly instalments.
- Flexibility: Copier rental offers the highest amount of financial flexibility as it is the lowest-commitment option.
- Tax Allowable: You can write off your rental payments as a business expense, unlike purchasing which requires you to pay tax yearly.
- Get Up-to-Date, New Equipment: You can swap out your old equipment for the latest models as they are introduced to the market, at no extra cost. This way, you avoid owning depreciating assets that will eventually become obsolete.
Cons of Copier Rental
- Shortest-Term Agreement: While copier rental is low commitment and short-term, this may not be suitable for businesses that have a higher or longer-term demand for printing or copying.
- No Ownership of Equipment: Renting copier equipment essentially means that you are borrowing it from your provider, meaning you never fully own it and will have to return it once the rental period ends.
- Can’t Sell or Damage Equipment: As you don’t own the copier equipment, you aren’t legally permitted to sell it, and damaging it will incur extra costs from your provider.
Copier Leasing
Copier leasing is a slightly longer-term option. It is best suited for businesses that expect to have consistent printing or copying requirements over a period of several years. Leasing agreements tend to span from 12 to 60 months, with some lasting even longer than this. They usually involve making quarterly or monthly rental payments, eliminating the need to pay the full price of the equipment up front.
Pros of Copier Leasing
- Low Up-Front Costs: By choosing to lease copier equipment, the cost of the equipment is spread out over the agreed leasing period, eliminating the need to pay the full price of the equipment up front.
- Fixed Payments: The payment plan that you agree with your provider at the start of your lease will remain fixed for the duration of the leasing period. It is also unaffected by fluctuations in interest rates.
- Flexibility: You can arrange your payment plan with your provider to suit your cash flow, determining the exact length of the contract, as well as the payment schedule.
- No Tied-Up Capital: The money that would otherwise be spent on purchasing the copier equipment can instead be used to develop other parts of the business.
- Tax Allowable: You can write off the lease payments as a business expense.
- Adds Assets: Copiers on a finance lease can be listed as ‘fixed assets’ on your balance sheet.
- Get New Equipment Mid-Term: With copier leasing, you have the option of swapping out your equipment mid-term for newer models.
Cons of Copier Leasing
- Long-Term Fixed Contract: Signing a copier lease agreement commits your business to pay for the copier for a term of at least 12 months, or as long as the agreement states.
- No Ownership of Equipment: Like copier rental, you will never fully own the equipment, and will ultimately have to return it to the provider at the end of your agreement term.
- Organisation Must Pass Credit Checks: Before taking out a copier lease agreement, your business will be subject to credit checks. This may prevent new start-ups or those with poor credit from being able to take out a printer lease.
Purchasing Copier Outright
Purchasing copier equipment outright is the longest term solution, as well as the one that requires the most commitment. This is the only option in which you become the full owner of the equipment, as it becomes a business asset once you pay the full outright purchase price.
Pros of Outright Copier Purchase
- Ownership of Copier Equipment: Once you purchase the copier equipment at full price, you become the full owner of it. You can list it as an asset on your balance sheet, unlike rented copier equipment.
- Buying Process is Simple: With renting and leasing, you have to go through another company and will be subject to credit checks and negotiation of terms before you can receive your equipment. Purchasing the equipment yourself is a much more direct and simplified process.
- Control Over Maintenance: You have complete control over your maintenance schedule, whereas rented or leased equipment often require maintenance services in accordance with the provider’s specifications.
Cons of Outright Copier Purchase
- High Up-Front Costs: Purchasing copier equipment outright involves the highest initial expense, as you have to pay for the equipment in full from the outset. Renting or leasing the same equipment allows you to spread this cost out over a period of months or years instead.
- Depreciating Asset: As soon as you purchase the copier equipment, it becomes a depreciating asset that will eventually have to be disposed of.
- Obsoletion of Equipment: Your purchased copier equipment will inevitably become obsolete with advances in technology. With rental or leased copiers, you get to swap out the old equipment for new devices as soon as they come out.