Use, Not Ownership

In deciding how to pay for an equipment acquisition, it is important to remember that …

It Is The Use, Not The Ownership, Of Equipment That Generates Profits

Before seeking out a bank for a loan to buy equipment, consider that there is a difference between ownership of equipment and use of equipment from the perspective of profit generation. The only time that ownership of an asset earns profit is when that asset appreciates in value - like real estate, patent rights; precious metals or collectibles. If it is an appreciating asset, it makes sense to own it. If it is not an appreciating asset, it is logical to gain the use of it for the time that you are going to need it. Leasing facilitates this goal.

Another factor mitigating against ownership is that new technology is obsolescing everything that was “new technology” before, and that is something that is going to continue to happen in the future... only faster. So, given that most equipment is going to be worth very little very soon, ownership becomes even less desirable.