You may be reviewing whether or not to purchase restaurant furniture and fixtures or to lease them. This is a decision that can mean the difference between a profitable bottom line or one that is less so. Before making the choice between buying or leasing, here are some suggestions to review, so you have a better understanding of the topic
Review the lease contract with care. You shouldn't assume that anything is included in the contract unless you have seen it. Better yet, have your business attorney and your tax accounting review the contract. In most instances, negotiation to get the exact terms you need is beneficial. The lease should be set up in a way that your bookkeeper and your attorney each approve.
There are advantages of choosing leasing over purchasing the equipment and fixtures you need. For example, the cost of monthly payments tends to be less than the cost of purchasing using a payment plan. When you have limited financial resources, your cash flow is improved when you lease rather than pay your nest egg out for purchased fixtures.
When you use leased equipment, you can probably arrange a clause so that you always have the latest model or style in your facility. You will also want to ensure that maintenance for mechanical or electronic equipment is included within the terms of the contract. This feature is an advantage you get when you lease rather than buy. However, you will need to ensure that the contract speaks to the topic.
Leasing the restaurant equipment you need does have a disadvantage or two. You ordinarily don't own the equipment. If should go out of business before the lease term is completed, chances are that you will have to pay a penalty, which could be substantial. Because the equipment is not owned, it may have have tax implications. For example you may lose the tax benefit of depreciation, depending upon how your accounting system is designed.
When you are deciding between purchased and leased equipment, you will want to consider price, both for the original purchase, the monthly payment amounts and the tax-adjusted amount if that apply. It's important to be sure that your lease agreement is clear, easy to read, and doesn't contain any unpleasant surprises. Using leased equipment may allow you to keep the latest model or style in your facility. You will also have the option of including the maintenance in the cost of the lease.
