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Cash Flow Tip – Lease or buy a car for business, or equipment for business?
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Published on Thursday, 21 January 2021 09:15
While we had an interesting discussion about mistakes in business, the topic became whether to lease or buy business vehicle or stock/equipment, at a local business group.
The example one business gave, was to buy outright for equipment that would be have signs on it to advertise another business (he organised advertising for businesses). The issue was - spending $10,000 on the equipment took all the spare money the business owner had, while the payment for the advert was monthly over a multi-year contract.
Hindsight showed that it would have been better to get a loan for the equipment, then add his mark-up for the advert and service on top of the monthly re-payments, and he would still have his $10,000 to use for cashflow and marketing.
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