Leasing or renting assets (e.g. machinery or office equipment) can save you the initial costs of buying them outright.

Advantages

Advantages include:

• you’ll have access to a high standard of equipment that you might not have been able to afford otherwise
• interest rates on monthly instalments are usually fixed
• it’s a less risky alternative to a secured bank loan – if you can’t make payments you’ll lose the asset but not, for example, your home
• the leasing company carries the risks if the equipment breaks down
• as long as you make regular repayments for the period of the lease, the agreement can’t be cancelled
• it’s widely available

Disadvantages

Disadvantages include:

• you can’t claim capital allowances on a leased asset if the lease period is less than 5 years (or 7 years in some cases)
• it can be more expensive than buying the asset outright
• some long-term contracts can be difficult to cancel early
• you may have to pay a deposit or make some payments in advance

Contains public sector information licenced under the Open Government Licence v2.0.