Lease vs Buy Equipment — What’s Best for Your Business?
Lease vs Buy Equipment
Lease vs Buy Equipment — What’s Best for Your Business?
Should you lease or buy your next piece of equipment? Here’s a simple breakdown of what makes sense for your business — and how to save cash while keeping your operation moving.
Leasing — Keep It Flexible
Leasing is like renting — you use the gear, make regular payments, and at the end of the term you can return it, upgrade, or buy it outright. It’s ideal if you want to keep cash flow healthy and always stay up to date with newer models.
- ✅ Lower upfront cost
- ✅ Tax-deductible repayments
- ✅ Easy upgrades at the end of the term
For industries where tech or machinery evolves quickly — like transport, construction, or medical — leasing often makes more sense. You’re paying for *use*, not ownership.
Buying — Own It and Build Equity
Buying means you own the equipment from day one (or after paying it off). You can claim depreciation and build an asset on your books, which helps long-term value and resale potential.
- ✅ Full ownership after loan term
- ✅ Depreciation and GST benefits
- ✅ Great for equipment with long lifespans
According to business.gov.au, ownership can be more cost-effective if the asset retains value or if you plan to keep it for years.
Which Option Is Better for You?
If you’re expanding fast and want to keep your cash free, leasing helps maintain flexibility. But if stability and long-term savings are your priority, buying can be smarter — especially when financed strategically.
At Switchboard Finance, we help business owners structure deals to get the best of both worlds — sometimes even combining leasing and buying across different assets.
Related Reads
- Are Low Doc Equipment Loans Worth It?
- Top 5 Mistakes Business Owners Make When Applying for Equipment Finance
Frequently Asked Questions
Is leasing cheaper than buying?
Leasing usually costs less upfront and keeps cash free, but long-term buying can be more cost-effective depending on tax and depreciation benefits.
Can I buy the equipment after leasing?
Yes — most leases allow a purchase option at the end of the term. It’s common to upgrade or buy out the asset once it’s proven useful.
What’s better for tax?
Leasing often allows immediate deductions for payments, while buying lets you depreciate the asset. Always check with your accountant for what suits your setup.
