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25 June 2015

Lease or Buy a Photocopier

Lease or Buy a Photocopier

Lease or buy a photocopier

Whether leasing or buying a business machine, the most important initial step is to identify the right machine for your business and decide if you need a standalone printer, copier or a multifunction device.  Once you have made this decision, you then need to consider whether it is better to lease the equipment or buy it outright. Leasing your office printer or copier gives you the use of your office machines for a fixed term based on set monthly payments.  Your lease can also be structured to include consumables such as toners together with service, maintenance and technical support.

Buying office equipment involves a very high outlay so if you are a small or start-up business it may make more financial sense to lease your office printers and copiers, as you would avoid the high costs of buying outright.  Leasing equipment involves fixed monthly payments for a set number of years.  This not only makes budget planning easier but also frees up capital to invest in other areas of the business.

Office technology is continuously improving and developing and again, leasing can be a good option when it comes up upgrading your office devices.  A lease can be structured to enable you to upgrade to more up to date machinery when the need arises.  Quite often, when buying machines, by the time it is paid for, your office copier or printer is already out of date.  In addition, older machines can also be considerably less efficient with higher costs per page.

Regardless of whether you decide to lease or buy, the most important step is to identify the correct device to suit your exact printing needs and budget. 

 

Leasing

Leasing a photocopier is one way for you to avoid the initial capital outlay required for outright purchase. Leasing is a well-established and tax efficient form of finance, enabling cost-effective trade-up access to the very latest technology at the right time.

Some advantages:

Budgeting

Payments are made for a set period of time so you can accurately plan for payments.

Tax efficiency

Leasing can reduce your overall tax bill, as the cost is deductible as a business expense reducing the net cost of leasing the equipment. If you buy you will be able to claim 40% of the photocopier / printer purchase price against tax in the first year and thereafter claim 25% of the outstanding balance. If you lease you do not have to pay the cost of the photocopier immediately and you may reclaim everything you pay out on a by payment basis.

Upgrading Technology

It is well accepted that a photocopier is not a business asset that appreciates: IT depreciates faster than the vast majority of purchased assets. Photocopier leasing improves cash flow and creates a hedge against inflation, depreciation and obsolescence. Importantly, it allows you to take advantage of technology improvement at a time of your choosing and at a reasonable cost. By contrast, a business that owns its office equipment can only upgrade by reinvesting and disposing of the existing asset.

Multifunctional

Because the latest photocopiers are multifunctional, it makes sense to be able to upgrade all these products and facilities at the same time rather than having to deal with multiple outdated machinery.

Capital

It makes sense to use capital for expansion or appreciating business purchases. Leasing for office technology preserves precious resources for these purposes and other business opportunities.

Flexible Payment

You can choose the option that makes for the most comfortable leasing arrangement, normally up to 5 years, giving immediate access to the photocopier you need via payments your business can handle and without the large deposit normally associated with outright purchase.

Return on Investment

Let the new equipment provide you with a return. The reason for a new photocopier is to increase productivity. With leasing you are in the position to use the cost saving and increased production ROI to make the periodic payments.

Who retains the equipment at the end of the photocopier lease?

Title to the goods remains with the finance provider, which means the equipment does not show on your company balance sheets and therefore not applicable to the expected value depreciation over a fixed period. This of course gives you the advantage of staying in touch with the latest technology by changing your equipment towards the end of your lease.

Can we upgrade before the photocopier lease agreement expires?

Yes. A photocopier leasing facility allows businesses to keep up with changes in technology as your original installation can be altered either during or at the end of your lease period. The normal reason for this is due to a customer's expansion of business and their changing needs.

Why should I choose photocopier leasing?

All sectors of the Australian economy take advantage of photocopier leasing. It’s the most popular choice for small businesses that need a mid-to-high volume photocopier just as a large multi-national organizations prefers to keep a tighter control on their finances and enjoy the tax efficiency and upgrade opportunities of a lease agreement over purchasing.

How does photocopier leasing work in practise?

Leasing is a contract between a finance company and a customer, giving the customer use of the equipment on payments of rentals over a period. When you lease equipment you make a series of regular payments, instead of a large capital outlay.

Why lease a photocopier rather than purchase?

The cash flow and tax relief benefits of leasing provide a very strong case against cash purchase. If you buy equipment outright the capital invested becomes, in effect, tied up in a depreciating asset. Photocopier leasing on the other hand allows you to save resources for other purposes or opportunities.

 

To be sure of the right decision for your business, speak to our team on 13 14 12 now.