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Cash FlowThree Options You Can Use When Buying Business Equipment...

Three Options You Can Use When Buying Business Equipment and Property

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Businesses need to obtain assets and equipment to operate when starting, expanding, upgrading, or adding a new product or division. Each addition of tangible assets requires an investment but there are several ways to obtain them. You can obtain business equipment and assets three ways but you will need to determine which method is best for your company and each purchase.

Buy

Many business owners often decide to buy what is needed. This easily removes any doubt about what entity owns the asset, leaving it entirely in your hands to do with it what you want. This can be an excellent option if you have the cash on hand or can meet the installments if you choose to buy on credit. Remember that there will be additional costs of maintaining it once you own it.

Buying your assets can give you the advantage of claiming depreciation when it comes to tax time. You also have the privilege of listing it on your balance sheet as an asset. Overall, buying it is likely to be a little cheaper than leasing it. There may be a problem when selling it because it may be outdated.

Lease

Leasing can work well if you want a less expensive way to obtain larger items such as space for your business or multiple vehicles. It requires a much smaller initial investment, which will let you keep more cash available for other important needs. A lease may also be obtained more easily than getting a loan to buy. Oftentimes, a lease can be obtained even if you have bad credit.

Maintenance may also be provided for you with a lease. Once you have the lease, you will often be able to upgrade the equipment easily when the lease expires. Payments made on lease agreements are usually tax-deductible, but depreciation is not. Over the long term, leasing will cost more than buying, and breaking a lease early can be costly.

Leasing equipment can be a better choice in two situations. The first is when you need to purchase a lot of business equipment at once but do not have the cash to buy it. A second reason is if you need to obtain a loan for the purchase but can only get it at a high-interest rate.

Buy Surplus from the Government

If you are looking for discount prices that can sometimes be amazingly low, you may want to take a look at government surplus. They have just about anything for sale, which can include land, vehicles, furniture, computers, lab equipment, boats and planes, and much more. The items come from a variety of sources, which can include equipment that government agencies no longer use or need; property seized from criminals; and more.

When you want to buy government surplus, you simply need to put in a bid. The General Services Administration handles the sales (GSAauctions.gov or home.treasury.gov). Registration requires that you submit a TIN or an SSN and a credit card number. If you win the bid, it will be necessary to pick up the property with 48 hours. State governments also have similar auctions.

Assets obtained from government agencies may have different ways to place a bid. Sometimes, you may submit bids at a live auction, or it may require a mail-in bid. Other auctions, such as for real estate, are online only. Viewing real estate property can be done by appointment and other property can be seen at the location.

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