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Tom Meaglia, ChFC®, AEP®,

CLU®, CRPC®, MSFS

Chartered Financial Consultant

Investment Advisor Representative

Chartered Retirement Planning Counselor

CA Insurance Lic. #0567507

 

Meaglia Financial Consulting

2105 Foothill Blvd., #B140, La Verne, CA 91750

 

Toll Free: 800-386-3700

Bus:         909-593-6105

Cell:         818-681-8600

Fax:         909-593-6120

 

Email: tom@meagliafinancialconsulting.com

Website: www.meagliafinancialconsulting.com

March/April 2025

Should You Lease or Buy?

Barista, man and tablet for coffee shop inventory or online order on website in startup cafe. Small business owner, waiter and review with technology for stock menu or price checklist in store

Leasing equipment can be an excellent option for newer businesses short on cash, while buying may be better in the long run when possible. But the decision isn't that cut and dried. It would be best if you considered numerous other factors.


Buying
If you have the money and a solid cash flow, buying equipment may be less costly than leasing. It may also provide more choices, allowing you to shop around, compare prices, and get exactly what you want. In addition, owning builds equity in the equipment, so if you need to sell it, you potentially recover some of your initial cost.


Consider tax benefits. For example, if you finance your purchase, you can typically deduct the interest as a business expense. You may be able to deduct the depreciation for some business assets, such as automobiles. IRS Section 179 allows businesses to deduct the total purchase price of qualifying equipment purchased or financed during the year (within limits) rather than expensing it.


On the minus side, buying equipment entails higher up-front costs, ties up cash that may be better used for other expenses, and puts the responsibility for all maintenance on your business. Depending on the type of equipment, you also risk obsolescence.


Leasing
Leasing gives you easy, predictable payments spread over time and leaves the business with more cash for unexpected expenses or business opportunities. It may be a good option if you're looking to build your credit.


You also reduce obsolescence risks if your lease allows for technology updates and regular maintenance is included. As for tax benefits, payments are typically a deductible business expense.


Detractions include a total cost that usually exceeds the purchase price, no equity in the equipment, the leasing company controls maintenance, and may limit your choices. You may also need help altering the lease agreement to meet your needs.


Your financial professional has experience with other businesses and can assist you, too.


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Thomas Meaglia is an Investment Adviser Representative of Coppell Advisory Solutions LLC, dba, Fusion Capital Management, a registered investment adviser that only conducts business in jurisdictions where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting.
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