A coffee machine is crucial to running a cafe. However, they are extremely expensive to buy outright. Fortunately, you can lease a coffee machine and reduce your immediate outgoings considerably. By spreading the cost of the machine across its working life, you will have more capital to spend on important parts of the business including training and unforeseen issues. If you’re sat there with the available funds to buy outright, keep on reading to find out why a leased coffee machine is more beneficial to you.
Higher Quality Machine
When business owners buy a coffee machine in full, they’re usually looking for the cheapest option possible. However, the cheapest machine won’t necessarily be the best choice for the business. For the most part, a low-quality coffee machine won’t be able to produce enough coffee to reach the demands of the midday rush.
When you decide to lease, you don’t need to look at the bottom end of the line. When you’re searching for a machine, you will find plenty of commercial coffee machine rental options with modes available to suit all business needs.
Less Initial Outgoings
Paying for a coffee machine in full means releasing a significant amount of capital in one go. However, through leasing, you can spread the cost over affordable monthly payments. When you lease a coffee machine, you will only need to pay for it throughout its functional life. Alternatively, if you buy one outright, you will need to maintain it and replace it if it breaks sooner than expected.
Lease payments for coffee machines are classified as tax-deductible, which means you can offset the cost against your taxes. The reason being that leasing is a business operating expense as opposed to capital expenditure.
As well as holding tax benefits, if you’re VAT registered, you can reclaim any VAT payments you’ve made on monthly lease payments. During times of hardship, this makes leasing the most viable option for businesses of any size.
Frees Up Bank Loans/Overdrafts
When you buy a coffee machine in full, you may have to put the payment on a credit card or overdraft. However, when you lease a machine, the expenses will be covered by your monthly income. Having your overdraft and bank loans free means that you can invest in other important parts of the business.
Greater Upgrade Options
When you buy a coffee machine, you are stuck with the machine whether your business grows or the machine starts to wear down. With a leased coffee machine, however, you will usually have the option to upgrade based on the expansion of your business. Further, if your machine fails, you will be supported in repairs or gaining new equipment.
Easier To Budget
Managing cash flow is important to running a successful business. For the most part, lease agreements are fixed term, which means that they won’t be impacted by interest fluctuations. Therefore, you will know exactly what needs to go out each month.
Your coffee shop’s revenue relies on the production of coffee. When you lease a coffee machine, you are paying a monthly fee to create the product that makes you money. At the end of the month, you will have easily made enough to make repayments. If you make a large payment and choose to buy, you won’t be able to repay as quickly.
Coffee machines are an expensive but vital part of running a successful cafe. Paying for one upfront makes monthly cash flow harder to track and limits your ability to upgrade. Leasing will give you tax and VAT benefits as well as allow for easy budgeting.