If you are buying business machinery there are lots of different things you need to take into account. This is especially the case when you consider just how crucial your purchase will be – it will have a massive impact on the successfulness of your business and so you need to make sure you get it right.
The following factors are just a handful of those you need to take into account – the size of the machine, the brand, the type of machine, where you are going to acquire it from, the cost of purchase, and the cost of running. Aside from these points, one of the main decisions you need to make is whether you are going to lease or buy the machine. There is no right or wrong answer here – it is all about figuring out what will work for your company.
This post helps you to come to the right conclusion for you in relation to either leasing or buying by presenting information on both. So, keep on reading to find out all you need to know…
Should you purchase machinery outright?
First and foremost, let’s take a look at the option of buying the machinery outright rather than leasing it. A lot of business owners tend to prefer this solution and the main reason why is because they know they are spending their money on something they are going to have full ownership of. Therefore, they feel like they are investing in something worthwhile, rather than spending their cash on a machine that is ultimately someone else’s.
This tends to be the best option to go for when you know the machine in question is one you are going to use in the long term and on a regular basis as well. You have to determine whether the cost of buying it outright is going to be worth how much use you are going to get out of it.
Nonetheless, not all business owners have to use their own funds to afford the purchase of these machines. A lot of people will lend cash in order to finance the purchase. This is something you should do with a lot of caution – make sure the finance option is right for you and comfortable.
Aside from this, it is imperative to note that you will literally be responsible for all costs and all maintenance in regards to any business machinery you buy outright. So, incorporate plant machinery insurance and servicing costs into your calculations.
Should you lease business machinery outright?
So, on the other hand, instead of buying agricultural machinery you have the option of leasing it instead. What does this actually entail? Well, you will pay the company in question on a monthly or yearly basis for use of one of their machines. They will still own the machine yet you will be granted exclusive access to it for the time period that you have both agreed upon.
This is a great option for those that cannot afford the huge outlays associated with buying a machine up front, or have struggled when it comes to getting the necessary finance. Moreover, if you do not see the machine as a long term solution, rather as something temporary, then it is definitely better to go down the leasing route.
Contracts tend to last anything between three and five years when it comes to leasing, although some companies will provide different options. If you wish to cancel the lease early you will probably be subject to a penalty. Make sure you read the contract in full before you agree to anything, as the last thing you want to do is be tied into something that is not right for your company.
So, there you have it, both options you have to consider when it comes to acquiring business machinery. Should you purchase the machine in question outright? Or, should you lease it? There is no right or wrong answer – it all depends on what is right for your business specifically. We hope that the information that has been provided in this blog post has helped you to come to the decision that is right for you and your company.