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Gerald Patrick posted a new Financing A Business thread on 6/30/2008

Buy vs. Lease

I am in need of updating some of my IT equipment for my small business. I have always been a buy it type of guy but have been looking at leasing as a way to optimize my cash flow.

Are there potential downsides to leasing that I should be aware of?
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Bill Seneff Responded on 6/30/2008


Long term payments and personal gaurrantees are the down side. You are paying more for the goods than necessary. Only if leverage is required for your position should you consider the lease option.
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James Williams Responded on 7/7/2008


Avoid personal guarantees if possible. That cannot be emphasized enough.
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Ben Bellinger Responded on 7/15/2008


I agree with BusDeveloppor. You pay way too much to lease, or course you probably already know that if you're usually a buying kind of guy. I would buy unless you were in dire straights.
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Joe Burns Responded on 7/16/2008


Leasing can be a viable option to spur growth when cash is tight. Make sure you do an apples to apples comparison when you are analyzing leasing vs buying. Adjust the terms and cost of money accordingly.
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