To Lease or Not to Lease

Every business has to invest in technologies or equipment in order to grow and maintain a competitive edge. The purchase of capital equipment such as waste handling equipment is a strategic investment. It can boost a company's performance and profit while building long-term customer value. However in these tough and uncertain economic times many are justifiably cautious in spending large sums of money and outlaying valuable capital upfront for new equipment purchases.

There is, as the popular slogan goes, “Another way” - According to the Finance & Leasing Association (FLA) leasing as a means of financing investment in new business equipment has grown significantly in the past year. Overall, asset finance (leasing and hire purchase) new business grew in November 2011 by 29% compared with the previous year, to reach almost £1.9 billion. This was the third largest monthly total recorded in the whole of 2011. In the eleven months to November 2011, new business grew by 3% to £18.7 billion.

So in times of challenging economic conditions is it better to purchase or lease waste balers or waste compactors? Below we look at the benefits of both purchasing outright & leasing.

Buy an asset outright

Buying outright is a good option if you have the capital available, or if it is essential that you own the equipment. However, in the current, often challenging economic climate, large capital expenditure will affect your cash flow. With uncertainty abound it can be wise to safeguard cash flow as a buffer to any potential down turn.

Hire purchase or lease

Paying for goods on hire purchase or leasing equipment allows you to use an asset over a fixed period in return for regular payments (leases start from just £25 / week). With leasing you simply choose the equipment you require in return for paying a rental fee each month. This arrangement can allow you to benefit from the advantages of owning the latest, most technologically advanced equipment all without having to pay up front!

The smaller payments will leave you with more cash, however it should be pointed out that you may need to pay interest on your instalments, meaning more is paid for goods in the long run. However these long term increased costs are often offset by the savings in costs and productivity that having new equipment provide.

Leasing means you may never own the asset outright. However, you can often update your equipment without the expense of buying newer models and without fear of owning a rapidly depreciating asset. When the lease period finishes you simply hand it back and start afresh with the latest bit of kit.

Many equipment suppliers also provide full maintenance and service on all leased machines and build this into their lease prices meaning you have full peace of mind when it comes to maximising uptime.

For all your Baler or Compactor needs, whatever your budget, we would be delighted to help! For more information about PHS Wastekit’s services and range of compactors and balers see www.phswastekit.co.uk or contact the customer service team on 0800 169 3534.