Finance Options for Your Office Printer

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Most customers are unsure what the best financial option is for their business when it comes to their new office printer. Let’s take a closer look at the advantages and disadvantage of each.

Option 1: Buy

Advantages

  • No interest repayments
  • Depreciate the capital costs over a 5-year period
  • You own the asset outright forever

 

Disadvantages

  • Takes up a large amount of your capital upfront
  • You are stuck with the machine for 5 years until the asset has depreciated
  • As technology advances, your asset will decline in value

Option 2: Rent

Advantages

  • No large upfront capital costs
  • Monthly payments are 100% tax deductible
  • May have flexibility to upgrade or add equipment during the agreed term

 

Disadvantages

  • You don’t own anything at the end of the agreement
  • If you want to upgrade the machine before the agreed term has expired, some third-party finance vendors will add the balance of remaining payments (payout) onto the new equipment rental agreement charges
  • If you want to add equipment to the agreement during the term, some third-party finance vendors will restart the rental term, leaving you stuck with old equipment on a new contract
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Option 3: Lease

Advantages

  • No large upfront capital costs
  • The interest charged on the lease payments are 100% tax deductible
  • The lease value is depreciated off your books over a 5-year period
  • You own the asset once the original residual or balloon amount is paid

 

Disadvantages

  • The equipment is deemed an asset and is depreciated over a 5-year period
  • If you need to replace the machine within the lease term, all outstanding repayments (payout) would need to be paid in full or added to the new equipment lease agreement
  • By the time you own the equipment, the real asset value is minimal as technology has changed, plus more than likely the machine’s reliability has waned & the print vendor has annually increased your metered service agreement costs
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