To lease or not to lease...

A

Angrius

Carbonite Member
Here is the situation. I need two fx1 cameras for this spring and I'm thinking about leasing because I have heard you can write the equipment off every year. What have you guys done in regards to your camera equipment when starting your business?
I'm in Canada eh so i'm interested in hearing from anybody but if there are canucks out there please throw in your two cents as well please. Thank you.:)
 
I don't about canuck tax law but in aus you can claim part of your gear through tax. Probably the best way to look at it is to compare the cost of leasing the gear over purchasing it outright and figure out a rough projection of your future/ potential earnings and decide whats best for you based on those figures.

Personally i prefer to buy gear outright, taking loans out if i have to and claiming what i can back on tax.
 
all depends on cost of the financing: what cash on hand versus loan payments versus lease payments. We have purchased and leased over the years...the best financial scenario is to buy outright -it's a capital expenditure, and it will depreciate faster than what your 'useful life' will be on the camera(s) for tax purposes. Sure you can write down the loan and/or lease as a business expense, but you are paying additional fees to someone else as opposed to keeping the cash in your pocket. Cash flow is key, however.
 
If you can pass the due diligence for a lease you would likely be better off getting a loan and then claim the interest and the depreciation. Then you can have the gear as a business asset. If you have a well established business with great cash flow then it might make sense to lease.

Electronics will depreciate fast enough to give you good tax benefits plus you will actually own the gear in case you want to sell and get a better model. You generally don't own leased stuff, although certain types of lease, called a conditional sales contract does give you option to own an certain points. Thats common with things like vehicles.
 
It's funny I was thinking of doing that at vistek with an FXq and if I decide to keep it it's a $10 buy back. But I don't know how to write it off, expecially since I have not yet started a business.
 
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