When you look at it casually, it seems obvious that purchasing the credit card equipment is always a better alternative to leasing, because at the end of usage time of the equipment, the lease paid would amount to triple or more of the upfront cost incurred while purchasing the same equipment. This may be better illustrated with an example: You have a choice of purchasing a credit card terminal for $500, or you can take the same equipment on lease for $30 per month for 4 years. The lease payments over the stipulated time frame would amount to $1,440. This sum is high because leasing your equipment is risky and the leasing company needs to cover up for the possibility of a customer refusing to pay or discontinuing the monthly lease payments.

Right now, a purchase definitely seems to have an upper hand over leasing. However, there are factors that must be considered before making your final decision about whether to lease or to buy your credit card processing apparatus:

Cash flow
Cash flow is a very important consideration. If you have enough cash that you can spare from your business investments, you must seriously consider purchasing the equipment. However, if you’re running tight on cash, it would make financial sense not to put away a large sum of money to buy a credit card terminal. Instead, leasing the equipment would be the right choice, provided the cash you are saving can be used in your business to provide a return on that amount that will likely exceed your leasing costs.

Tax
Lease payments allow you to deduct the interest portion thereof from your taxable income each year. Speak to a qualified accountant to know the numbers.

Legal Title
Another benefit of making a purchase is that you will be the rightful owner of the credit card terminal machine. On the contrary, while leasing, you do not own the equipment unless you’ve finished making payments, and even then you may asked to make a final ‘purchase option payment’ at the end of the lease term.

Financial statements
Also, consider that your financial statements generated within the time-period of the lease will show the outstanding balance as a liability.

Warranties
This is another point that is often ignored or forgotten. When you purchase your credit card equipment, the warranty you receive on it comes directly from the manufacturer. On the other hand, in case of lease, the warranty comes from the leasing company. The deal is good and worth taking if the leasing company offers you the choice of free upgrades on your credit card equipment at a later date.

All said and done, it’s always best to have your own credit card processing machinery. Purchase your credit card terminal equipment so long as you can comfortably afford the upfront cost. This is because, now-a-days, due to the rampant use of these tools, the price has gone down and there is no harm in paying a little more at one time to ensure security and usage of equipment that best suits your business needs!