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Should You Rent, Buy or Lease Your Equipment?

(5 min read)

When it comes to getting equipment needed for your business to be a success, you’ve got a lot of options. But which one is best for you and your biz? Should you rent, buy or lease?

It’s important when figuring out which option is best for your business to consider the length of time you need the equipment, your budget, and your long term plans. How much can you afford to spend, and do you have capacity to maintain equipment yourself? What kind of training do your employees need to operate and maintain the equipment? Is this the type of equipment you’ll want to upgrade regularly to newer models?

We get it — making decisions like these can feel overwhelming. That’s why we're breaking down the pros and cons of renting, buying and leasing equipment so you can easily decide which one works best for you.Whether you're a startup or a well-established business, this information will help you make an informed decision about how to acquire the equipment you need to run your business.

Renting Equipment

Doing short-term projects or on a tight budget? Renting equipment may be the way to go — it’s a great way for getting the latest tech without a big financial commitment and no maintenance worries. You'll avoid large up-front costs and get access to specialized tools when needed. 

Renting equipment isn’t without its drawbacks. Rental fees can add up quickly if used for long-term projects — you pay for each rental period rather than making a one-time purchase, so if you’re using that piece of equipment for a long time, it may end up costing more in the long run. You also won’t build up any equity with equipment rentals, so they won’t contribute any value to your business. Lastly, some equipment rental options may not be available through a rental service or their availability is delayed — you’re at the mercy of a rental company if this is the route you choose to go.

Buying Equipment

Buying your own equipment is another option — but it demands a bigger financial commitment upfront. That said, there are definite advantages to owning your assets outright. Owning business equipment allows you to customize it for your needs and use it for as long as you’d like. You may also qualify for tax deductions if the equipment is used solely for business purposes — and owning your equipment contributes to the equity of your company.

That said, the large initial investment of buying equipment can be a tough expense, especially for smaller and newer businesses. Additionally, owning your equipment means that you have to manage the maintenance, repair and replacement costs yourself. Equipment obsolescence is also an issue; depending on the type of equipment and the industry you’re in, it may become outdated quickly and require replacement sooner rather than later. And if you don’t have proper product knowledge, you may end up being stuck with a piece of equipment you don’t need. 

When it comes to pricey equipment purchases, it may not always make fiscal sense — investments have to be weighed against potential returns and depreciation costs. 

Leasing Equipment

For a middle ground between renting and buying, equipment leasing offers many benefits. With equipment leasing, you're able to get the newest and most up-to-date equipment for your business—without the high upfront costs since they rarely require a down payment. This means you'll always be ahead of the competition and able to keep up with changing technology without being too hard on your cash flow. Leasing allows you the flexibility to upgrade equipment as needed — without the expense of a bank loan or purchasing the equipment in full. 

Leases are a tax deductible business expense, which can help reduce the net cost of your lease. Flexible lease terms are easier to obtain than a loan to purchase equipment, which can be a significant advantage if you have bad credit or need to negotiate a longer payment plan to lower your costs. Leasing also passes the burden of obsolescence onto the lessor, as opposed to buying the equipment yourself and dealing with its value depreciation — you’re free to upgrade to something newer and better after your lease term.

Many leasing companies don’t offer rent-to-own contracts and you don’t own your equipment outright at the end of your lease term, which means you haven’t built any equity for your business. You are also obligated to pay for the entire lease term and continue to make payments for that entire lease period even if you stop using the equipment.

Arbutus Capital is proud to stand out from its competitors in the equipment leasing industry by providing more beneficial options for our customers. We offer rent-to-own contracts with smaller Purchase Options than typical lease finance structures — this means you are able to build equity for your business while leasing your equipment and you have the option to own it at the end of your lease term. Our lease rentals carry the benefits of taxable write-offs, cash flow with longer terms, and the ability to finance a wide range of situations depending on your business. 


That’s it! Equipment options don't have to be complicated. By doing some research, understanding your options and weighing out the pros and cons, you can make the best decision for the needs of your business. With the right guidance, you can find the perfect solution for your business, whether you choose to rent, buy or lease your equipment. And if you’re ready to make some equipment upgrades, contact Arbutus Capital today to learn about your equipment leasing options.

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