Ending The Debate: Is It Better To Purchase With A Bank Loan Or Lease Equipment?

When it comes to owning a business, no financial decision is ever a small one. This is especially true when it comes to purchasing equipment which the business requires in order to operate. There are two main options which a business owner can use when it comes to obtaining these goods: leasing or taking out a bank loan to fund a purchase. The debate about which of these two methods is better has been raging among professionals for years. As someone who is about to make the decision, any business owner should take the time to learn the facts before committing their profits to the decision to lease equipment or purchase it with the help of a bank loan.


Leasing equipment is possibly the best option for owners who run a business that requires large pieces of machinery or other expensive equipment in order to sustain everyday operations. There are many benefits, including lower cost overall, flexibility and ultimately a giant reduction in stress. Those who lease equipment pay a flat rate each month for their wares. This is oftentimes much cheaper than payments on a loan would be when considering interest. The flexibility of this option is unparalleled by traditional methods as well. The contract on the leased equipment lasts for a specified number of years, and at the end of this, the business owner in question has several options. If they are satisfied with the arrangement, they can opt to renew the contract. If a newer or better version of the equipment is on the market, they can exchange the goods which they already have. Finally, they can also negotiate to purchase the equipment in question if they need it to be a permanent addition to their business. All of this not only serves to keep a business totally up-to-date with its equipment, but can remove several hassles which a business owner much normally deal with.


While the choice to lease equipment is superior in most cases regarding large machinery or other risky goods, purchasing with a loan is not without its merits. If the business in question is an office and only requires computers, keyboards and similar items, purchasing outright may be the best deal, as these are fairly risk-free items and may need to be personalized to an extent for business use.

Each option has its merits. As a business owner it’s necessary to assess the financial situation of the establishment in question to determine which route will be most beneficial for both the present and the future.

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