Despite months of COVID quarantines and shutdowns, businesses are coming back online, and construction continues at a fever pace. No doubt, digital workflows have become more commonplace amongst AEC firms and project partners, yet there is still a need for producing and using large paper construction plans.
This means that many small to medium size AEC companies will soon entertain the idea of upgrading their wide-format tech for a variety of reasons – upgrades, end of lease trade ups, expansion, etc.
Fortunately for them, equipment costs have come down, so it can make sense to acquire new equipment by cash or even credit card. However, equipment leasing remains a very viable option for many businesses.
But, when it comes to leasing, options can be a bit dynamic and a little confusing, so make sure you understand all the factors before you decide which option suits you best.
"It is well accepted that a plotter or wide-format MFP system is not a business asset that appreciates: This type of technology depreciates faster than the vast majority of purchased assets. So, save purchases for assets that either appreciate or depreciate less."
Leasing vs Purchasing
Ultimately, leasing lets you get the new technology now and pay for it over time. Here are some specific benefits of leasing that some companies use to their advantage.
Many businesses earn revenue over time - to pay as you use it makes sense: Why pay out in one lump sum when with leasing you can make small fixed manageable payments? Just pay for the portion that you are using at the time.
Payments made throughout a lease arrangement are unaffected by changes in interest rates; you can therefore accurately plan for lease payments in advance.
And as cash flow can be forecast, the recurring cost of the leased device can be compared with projected revenue and profits generated by using the equipment during specific projects and standard business operations.
Leasing can reduce your overall tax bill, as the cost is deductible as a business expense reducing the net cost of leasing the equipment. This factor will help determine whether to rent or lease, rather than buy.
If you lease a plotter you do not have to pay the cost of the plotter immediately and you may reclaim everything you pay out on a 'by payment' basis - monthly, quarterly, or annually.
It is well accepted that a plotter or wide-format MFP system is not a business asset that appreciates: This type of technology depreciates faster than the vast majority of purchased assets. So, save purchases for assets that either appreciate or depreciate less.
Leasing gives more freedom for up to date office equipment, to be installed as required, less affected by budget restraints. Large format printer leasing improves cash flow and creates a hedge against inflation, depreciation, and obsolescence. Importantly, it allows you to take advantage of technology improvement at a time of your choosing and at a reasonable cost.
By contrast, a business that owns its office equipment can only upgrade by reinvesting and disposing of the existing asset.
It makes sense to use capital for expansion or appreciating business purchases. Leasing for office technology preserves precious resources for these purposes and other business opportunities. Furthermore, you can preserve your existing bank lines and optimize your use of commercial credit sources.
You can choose the option that makes for the most comfortable leasing arrangement, normally leases are writing for 36 or 48 month terms.
giving immediate access to the printing equipment you need, the necessary speed, and the right multi-functional technology, via payments your business can handle and without the large deposit normally associated with an outright purchase.
Return on investment (ROI)
Let the new equipment provide you with a return ... The reason for a new wide-format system is to increase productivity; with leasing you are in the position to use the cost saving and increased production ROI to make the periodic payments.
FAQs about Leasing Plotters
Who retains the equipment at the end of the plotter lease?
Title to the goods remains with the finance provider, which means the equipment does not show on your company balance sheets and therefore not applicable to the expected value depreciation over a fixed period.
This of course gives you the advantage of staying in touch with the latest technology by changing your equipment towards the end of your lease.
Can we upgrade before the wide-format printer lease agreement expires?
Yes. An equipment leasing organization allows businesses to keep up with changes in technology as your original installation can be altered either during or at the end of your lease period. The normal reason for this is due to a customer's expansion of business and their changing needs.
Why should I choose large format equipment leasing?
All sectors of the US economy take advantage of business equipment leasing; it is the most popular choice for small businesses that need a mid-to-high volume plotter or multi-function system.
This is just like how a large multi-national organization prefers to keep a tighter control on their finances and enjoy the tax efficiency and upgrade opportunities of a lease agreement over purchasing.
How does plotter leasing work in practice?
Leasing is a contract between a finance company and a customer, giving the customer use of the equipment on payments of rentals over a period. When you lease a printer for office use, you make a series of regular (usually monthly) payments, instead of a large capital outlay.
Why lease a printer rather than purchase?
The cash flow and tax relief benefits of leasing provide a very strong case against cash purchase. If you buy equipment outright the capital invested becomes, in effect, tied up in a depreciating asset.
Plotter leasing on the other hand allows you to save resources for other purposes or opportunities. To be sure of the right decision for your business specifically, speak to your accountant who can advise upon what is best for your company financially.
Plotter Lease Cost Summary
Leasing can be a wonderful method of upgrading technology without the need for large amounts of capital:
- Pay little or no money down in most cases.
- Flexible – choose the contract length that provides you with the best balance between functionality and monthly payment.
- Upgrade option – most leases provide you a way to trade-up to new, better technology at the end of the lease.
- Savings – in addition to eliminating a capital expense, leasing also provides you with a way to get extra tax benefits.
See the full line of Canon Color Plotters
The page was originally published in 2011 but was updated in 2020.