Modern Tool BC has leasing programs available through our trusted local partners, or we can work with your preferred financial institution, or credit union.
Read about an important new federal government program which may allow you to depreciate 100% of your leased equipment in the first tax year.
Should your business lease or buy equipment?
The answer depends on your situation. Leasing equipment can be a good option for business owners who have limited capital or who need equipment that must be upgraded every few years, while purchasing equipment can be a better option for established businesses or for equipment that has a long usable life.
Each business is unique, however, and the decision to buy or lease business equipment must be made on a case-by-case basis.
Advantages of Leasing Equipment
Less initial expense. The primary advantage of leasing business equipment is that it allows you to acquire assets with minimal initial expenditures. Because equipment leases rarely require a down payment, you can obtain the goods you need without significantly affecting your cash flow.
Tax deductible. Lease payments can usually be deducted as business expenses on your tax return, reducing the net cost of your lease. Thanks to a new federal government decision, in many cases 100% of a machine can be depreciated during the first year. See more information.
Flexible terms. Leases are usually easier to obtain and have more flexible terms than loans for buying equipment. This can be a significant advantage if you have bad credit or need to negotiate a longer payment plan to lower your costs.
Easier to upgrade equipment. Leasing allows businesses to address the problem of obsolescence. If you use your lease to obtain items that may be outdated in a short period of time, such as computers or other high-tech equipment, a lease passes the burden of obsolescence onto the lessor. You are free to lease new, higher-end equipment after your lease expires.