Trio of options available for acquiring equipment

When you're looking to purchase a piece of office equipment, a key question is whether to purchase a piece of equipment, sign up for a leasing program or consider other alternatives.

Ken Edwards, sales manager for Ikon Office Solutions, said 85 percent of his customers lease their office equipment from him while the remaining 15 percent pay up front.

"Leasing is generally for people who want new technology and the flexibility to upgrade or adjust their program based on needs," he said. "Then the customers have the option of changing their lease program during or at the end of the lease."

Edwards said there are several benefits to leasing vs. purchasing. "There's a tax benefit to leasing," he said. "With a lease program, you can depreciate the lease payment as an operating expense. If you paid cash, you would have to depreciate the cost of the equipment over time."

He said another advantage to leasing is not having to come up with all the money at one time.

"If you lease, there's one monthly payment," he said. "If you pay for it all at once, you're having to put out several thousand dollars all at once. Paying for it all at once is good for someone who knows he's going to use the equipment for seven to 10 years. But most people replace their equipment every 33 months."

Gene Templeton, owner of Progressive Business Systems Inc., said about half of his customers purchase their office equipment while the other half lease.

"The decision on what to do depends on the customer's needs and their accountant's philosophy," Templeton said.

With leasing, capital isn't all tied up in the equipment and the business owner is not tied to a smaller machine because of limited capital. Leasing also allows the business owner to get a copier at today's price and pay for it with tomorrow's inflated dollars.

The advantages of purchasing equipment, Templeton said, include no added interest while there often is with leasing programs, and some purchases can be written off as direct expenses.

An option to either buying or leasing is paying by the copy. For example, American Business Systems offers the Office Systems Program in which the business owner neither buys nor leases the equipment.

"The customer pays per copy using whatever copier/printer he wants us to install," said Tim Chambers, sales manager. "We supply everything but the paper: the service, the toner and so on. The customers get what they want, which is the copies. The customer is billed for whatever copies they make, all of the supplies, excluding the paper, and whatever service is needed to be done to the machine."