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Computer Leasing and Finance – Pros and Cons

If you own a business and you have the need for computers, then you may be wondering what your options are as far as acquiring the computer equipment. There are two options that you can consider, computer leasing and finance. You should educate yourself on the pros and cons of leasing vs financing.

If you decide to finance computers, you will need to get some type of loan to finance the equipment. This means that you will have a line of credit extended to you, either through your bank, or some other financing source. The downside of financing is that it ties up some of your working capital and leaves you with less lines of credit to work with. Also, you will keep the computers until you pay them off through the payment plan that is set up when you originally finance the computers.

As you well know, technology advances rapidly. If you finance a large amount of computers at one time, you will end up having those computers for at least a couple of years, maybe more.

A big difference between computer leasing and finance is that when leasing equipment such as computers, you may have the option to get new computers on a regular basis, as you are only leasing them, not paying them out on a finance plan to eventually gain ownership of the computers.

Another difference is that if you have to acquire a loan to finance the computers you want to purchase, you most likely will have to put down some sort of down payment. This is not the case with leasing. In a leasing agreement, everything is normally one hundred percent funded, and no down payment or money up front will be required.

Your best course of action, if you are considering whether to choose computer leasing or finance for your business needs, is to thoroughly research what each option requires of you. It all depends on if you are wanting to actually buy the computers over a period of time, or if you would like to have the option of replacing the computers with newer models periodically.