Lease Vs Buy | The Benefits To Leasing Your Machinery
What if you could save money by leasing your machinery and still own the equipment at the end of the lease?
We understand that purchasing new tools and machinery can be a significant investment for some businesses. That’s why we’ve partnered with one of the leading finance companies in the UK, Tower Leasing, to provide flexible pay monthly options across our product range. Making it easier than ever to acquire the equipment you need, without heavily impacting your cash flow.
Here’s just some of the reasons why choosing finance could be a great alternative to purchasing your equipment outright.
Why lease your new tools?
When you think of finance you may be of the opinion that although a useful way to spread cost, you’ll have to pay a premium for the convenience. This is just one of the many preconceptions you might have when deciding to lease or purchase your equipment outright.
In reality, flexible payment options from Tower could help you to keep up with the latest innovations, make budgeting easy and actually cost less than the price of the machinery.
If you’re a profit making business you’ll know that a corporation tax of 19% is applied to your profit at the end of each financial year. For every lease rental paid, your company is able to claim 19% in tax relief against the corporation tax. So your business can keep the cash rather than paying it to the HMRC.
Example based on a machinery purchase worth £7,500 ex VAT.
|Year||Capital Allowance||Tax Relief|
|1||12 rentals of £252.08||Less 19% = £574.74|
|2||12 rentals of £252.08||Less 19% = £574.74|
|3||12 rentals of £252.08||Less 19% = £574.74|
Tax Relief: £1,724.22
Once you take away the tax saving, the overall cost of leasing the machinery is £7350.66. That’s less than the cost of the equipment if you were to pay upfront in the first place.
Why choose to lease your tools?
Upgrade outdated equipment
Another great reason to lease rather than buy are the upgrade opportunities. Just like a mobile phone contract, you can choose to upgrade your machine at the end of the lease. Today’s rate of innovation means that machinery is often outdated only a few months after purchase. You can choose to send the old machine back and swap it for the latest model. If you decide there’s no better machine on the market, one final monthly payment and it’s yours!
Return on Investment
Leasing gives you the opportunity to see a return on your investment before you have even paid for it. Let the machinery pay for itself. Also, with no large outlays you can invest your capital elsewhere to generate extra income.
Maximise your budget
When choosing to lease your equipment, you’re able to structure your repayments to best fit your budget by spreading the cost of equipment over your desired period. This often means that you're able to purchase both a higher quality and a larger quantity of tools as no substantial upfront sum of cash is required.
In most cases a lease is based on monthly payments which stay the same throughout the lease period. This helps to forecast expenses and budget accordingly.
The simple process
When weighing up the pros and cons of whether to lease or buy your tools you may think it’s easier to buy outright, but the lease process is more simple than you may think.
Chat to a member of our knowledgeable Business Services team about the equipment you would like to buy. We’ll send the details to Tower Leasing and they’ll send you a lease quote clearly outlining set monthly or quarterly rental payments over a two, three, four or five year period.
If you decide to go ahead, Tower will clear your business for credit and send you a lease agreement. Once Tower Leasing receives your signed lease agreement your order will be processed and your lease activated. Finally, Axminster Tools will be in touch to arrange a convenient delivery day with you.
The information provided gives an overview of Tower Leasing Ltd and its services, and is for general information purposes only. Please note: Axminster Tools is unable to provide credit advice.
Get in touch
If you would like to find out more about financing any of our equipment or get a free quote, please give our Business Services team a call on 03332 406406 or email email@example.com.
Likewise, if you'd like to learn more about leasing, see here.
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