There’s going to come a time when your business’s equipment will no longer meet the needs of your company. Either your business will simply outgrow the equipment that you have in place, the equipment itself becomes irrelevant for the tasks that you have to achieve, or the technology will become obsolete. Regardless of what happens, it will be necessary to make an upgrade.
Of course, for some companies, making an upgrade is a lot easier said than done because of budgetary constraints. So when should you make the upgrade, and how can you save money in the process?
There are several signs that it could be time to upgrade your equipment. Perhaps your company is growing faster than expected, and your equipment isn’t helping you to keep up with the growth. Maybe you could significantly boost productivity and help out your employees by automating some of your processes. There could be new regulations in place that you can only meet with new equipment.
When the time comes to make the upgrade, you have a couple different options:
- Leasing. If you are looking to get new equipment that you know is likely going to need to be upgraded on a semi-regular basis (like computers or smart phones, for example) then leasing is likely your best option. By leasing, you get the equipment you need when you need it and only pay for it so long as you use it rather than paying the full sticker price. This means that you don’t have to deal with any sunk costs when the time comes to upgrade and you’ve only used the equipment for a few years. By avoiding depreciation of your equipment, you get much greater value on the payments you make.
- Financing. If owning the equipment that you are looking to upgrade or replace is in the best interest of your business, then financing is the right choice for you. Businesses are likely to choose financing if they are going to own the equipment for so long that depreciation isn’t much of a concern. Office furniture and certain types of agricultural and industrial machinery are common items that make more sense to be financed than leased. You wind up paying less to become the owner of the equipment because of how long the equipment lasts and the small chance it has of becoming outdated.
If you believe the time is right to make an upgrade or replace some of your equipment, work with Fidelity Capital on your leasing or financing plan.