In today’s dynamic business environment, the top challenges that confront both small and big businesses include finding a way to continue to enhance speed, scalability, adaptability and competitiveness. Experts caution organisations to be more conservative about costs, but this is something that may be hard to do when you want to boost productivity, which naturally requires investments in the form of additional equipment, industrial machinery, vehicles, software, hardware, and so on.

This is where the value of asset finance solutions come into play. Through asset finance, you will be able to acquire the equipment you need while preserving your working capital and even enjoying reduced tax payments in the process.

When you go for asset finance, you will have two options to choose from: Do you take out a loan to make a purchase, or do you lease the equipment you need? Review the following considerations that will help you determine which route best suits your needs and capabilities.

  1. Your budget.

    Getting a loan to buy the equipment may require a bigger amount of money at the onset, but you’ll never need to worry about on-going payments once you settle the final balance. On the other hand, leasing will require smaller monthly payments, but you will need to keep paying the bill as long as the equipment is under your care.

  2. Upfront cost.

    Know how much cash you will need to shoulder. With a loan, you will typically be required to make a down payment. With leasing, you may be able to obtain financing not just for the equipment but also for the fringe expenses such as delivery, installation and training.

  3. Timeframe.

    If you’ll be using the equipment for less than 3 years, leasing it is usually recommended. But if you think that you’ll need it for a longer time, it’s better to simply get a loan to make an outright purchase.

  4. Potential for upgrade.

    Leasing allows you to let go of the equipment once it becomes obsolete or requires an upgrade or replacement to keep up with industry trends and your changing needs.

  5. Long-term perspective.

    If you take out a loan, it’s important to ensure that you will be able to maximise the use of the equipment by using it for other projects when it’s not being used for its original purpose. If you think that you’ll be needing the equipment for a limited time only, it’s better to simply lease it so you can stop payment right after use.

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