Every growing business hits the same question sooner or later: should we buy this equipment or lease it? The answer affects your cash flow, your taxes and how fast you can grow. At Cardinal Business Financing, we help business owners work through this decision every day, so here is a clear, simple look at both options.
What Is Equipment Leasing?
Equipment leasing lets you use equipment for a set period in exchange for regular payments, instead of paying the full price upfront. Depending on the lease, you may return the equipment, upgrade to a newer model or buy it at the end of the term.
Leasing can cover a wide range of equipment, from medical devices and restaurant kitchens to golf course machinery, vehicles and office technology.
What Does Buying Mean?
Buying means you pay for the equipment with cash or a loan and own it from day one. You take on the full cost, the maintenance and the risk that the equipment loses value over time. For equipment that lasts many years and holds its value, buying can make sense.
Benefits of Leasing
- Preserve cash. Leasing can finance up to 100% of the equipment cost, so your cash stays available for payroll, inventory and growth.
- Predictable payments. Fixed monthly payments make budgeting easier.
- Easier upgrades. You can move to newer equipment as technology changes.
- Possible tax advantages. Lease payments may be deductible. Ask your accountant how this applies to your business.
- Faster start. You can get the equipment now and pay as you earn from it.
Read more on our Why Leasing page.
Benefits of Buying
- You own the asset. There is no lease term to return it.
- No end-of-lease decisions. The equipment is yours to keep, sell or trade in.
- Long-term value. For equipment you will use for many years, total cost can be lower over time.
- Freedom to customize. You can modify and use the equipment as you wish.
Leasing vs. Buying at a Glance
| Factor | Leasing | Buying |
|---|---|---|
| Upfront cost | Low | High, or a down payment |
| Monthly payment | Fixed and predictable | Depends on the loan |
| Ownership | Often at the end, or by option | From day one |
| Upgrades | Easy | You must sell or replace |
| Best for | Fast-changing equipment | Long-life equipment |
How to Choose
Ask yourself these questions:
- How long will I use it? Short or medium use points to leasing. Ten years or more points to buying.
- Will it become outdated? Technology and medical equipment often change quickly.
- How is my cash flow? If cash is tight or seasonal, leasing keeps more money in your account.
- What do I want at the end? Decide whether you want to own it, return it or upgrade.
- What does my accountant say? Tax treatment depends on your situation.
Industries We Help
Cardinal arranges equipment financing and leasing for many industries, including healthcare and medical practices, hospitality, restaurants, golf courses, construction and more. Equipment sellers can also offer financing to their customers through our Vendor Partner Program.
Frequently Asked Questions
Is leasing cheaper than buying?
Leasing usually costs less upfront. Over the full life of the equipment, buying can cost less if you keep it for many years. The best choice depends on your cash flow and plans.
Can I buy the equipment at the end of a lease?
Many leases include an option to buy, return or upgrade. The options depend on the lease structure you choose.
Can I lease used equipment?
In many cases, yes. Terms depend on the age, type and condition of the equipment.
How do I apply?
Complete our short equipment financing application, and a Cardinal advisor will review your options with you. All financing is subject to credit approval.
Find the Right Option for Your Business
Leasing and buying can both be smart moves. The right one depends on your equipment, your cash flow and your goals. See all our financing options, request a free consultation or call 866-578-5999 x1001.