Equipment buying is tough. Whether you’ve had your eye on something particular or just know you have a need to fill, pulling the trigger is a big decision. And then you have to decide how you’re going to pay for it.
Walk into any equipment supplier (or visit their website—it’s 2022 after all) and you’ll probably see a plethora of payment options. Most common are cash and credit—the old standards—but also on the table are in-store financing, a capital or equipment loan from a bank, waterfall financing, 3rd party financing, and veritable lease options.
All these options are designed to make equipment purchasing easier, but it can be overwhelming. As psychologist Barry Schwartz says, “when people have no choice, life is almost unbearable…[but when] we become overloaded...choice no longer liberates, but debilitates.”
That said, it’s up to you to consider, evaluate, and decide which payment option will make the most sense for you and your business.
At Clicklease, we offer simple payment plans through structured leases that make the financing process simple and straightforward—we even let you choose the lease terms that make the most sense for you.
But we know that leasing might not be the right choice for every business.
As you’re deciding what payment options works best for you, there’s one benefit of leasing that many small business owners don’t think about: tax deductions.
Taxes are complicated, so talk to a professional before making any big decisions, but here’s the short and simple version (at Clicklease, we like to keep things short and simple):
When you purchase equipment outright (with cash or a credit card)—or when you use a traditional, interest-based loan—you can deduct a certain amount each year as “depreciation.” In this world we live in, very few things get more valuable over time. Most things—including most equipment—slowly lose value over the years. That lost value is depreciation and it’s tax deductible.
You usually can’t deduct the whole purchase, or any interest you pay on a loan (or credit card) for the equipment.
Leases are structured a little differently. The lease provider (for example: Clicklease) buys the equipment directly from the seller. You, the customer, can then use the equipment to grow your business. It’s almost like you’re renting the equipment, but at the end of the lease term, you have the option to not return the equipment and own it yourself.
Because you don’t yet own the asset, you can usually deduct your entire lease payment each month as a business expense. (Again, we’re speaking in “usuallys” because we aren’t tax experts—talk to one). This can mean a big tax savings over the course of a year.
Still confused? Check out this video from one of our customers who explains it pretty well.
So is leasing the best option for you? There are a lot of pros and cons to consider. But if you’re thinking about financing, Clicklease makes it easy. We offer a final approval in seconds. We don’t require any complicated documents or trips to the bank. We approve people across the credit spectrum, and for amounts as low as $500. Plus, there’s no hard credit pull, so applying won’t impact your credit. And then there are the aforementioned tax benefits.
Want more information?
Give us a call today to see how Clicklease can help you grow your small business.
[Please remember: this blog is for informational purposes only. Talk to a tax/financing professional before making any business decisions.]