As a small business, we understand the daily challenges owners and operators face with juggling what seems like a million tasks at once. From managing internal teams to serving your customers, every decision needs to be strategic, every dollar matters, and every minute of productivity counts. When it comes to office technology equipment needed to help your business run smoothly, often small business decision makers are faced with the challenge of weighing necessity vs. financial impact. For essential equipment like an office copier, opting to lease, rather than purchase, is a smart way to access the technology you need without a significant upfront cash investment. However, navigating the world of office copier lease options can be daunting and convoluted.
That’s why we’ve put together this short guide to help small businesses explore how to choose the right office copier lease option that will fit both your specific needs and your budget.
Why an Office Copier Lease is a Smart Small Business Decision
Before we dive into the different options available to small businesses when it comes to an office copier lease, let’s take a quick look at the benefits leasing an office copier offers and why it should be a preferred choice for small businesses.
- Lower Upfront Costs: Leasing an office copier typically requires either minimal or no cash at the time of signing, freeing up crucial capital for other essential investments.
- Predictable Monthly Expenses: A fixed monthly lease payment makes budgeting easier and more predictable.
- Access to Newer Technology and Equipment: Leasing allows you to consider higher-end or more robust office copier options that fit your printing needs better, but you would not be able to afford an outright purchase. Additionally, leasing gives you the option to upgrade to newer, more efficient models at the end of your lease term, giving you the flexibility to scale as needed with your changing business needs.
- Tax Advantages: The IRS generally allows businesses to deduct the cost of renting or leasing business property if it is utilized for business purposes, so with office copier lease payments often being treated as business operating expenses, they can be tax deductible (consult with your tax advisor).
Office Copier Lease Options for Small Businesses
Now that we’ve covered the benefits of leasing your office copier, let’s take a look at the two most common office copier leasing options:
- Fair Market Value (FMV) Lease:
With an FMV lease, your monthly payments are typically lower compared to a $1 Buyout lease. The most popular FMV leases are offered for terms of either 36 months, 48 months, or 60 months. The longer the lease term, the lower the monthly payment will be. At the end of the lease term, you have a few options: extend your lease (often for an additional 12 months), buyout the remainder of the lease based on the fair market value (which will be determined at that time) to either return or keep the equipment, or return your existing equipment to upgrade to a new copier with a new lease.
An FMV lease is best suited for small businesses that prioritize lower monthly payments and want the flexibility to upgrade to newer technology at the end of the term. If you anticipate your needs changing, want to avoid ownership responsibilities, or simply want the lowest monthly payment possible, an FMV office copier lease is the best optionh.
- $1 Buyout Lease:
A $1 Buyout lease (also referred to as a Capital Lease) features higher monthly payments compared to an FMV lease. Similar to an FMV lease, the most popular lease terms for this type of office copier lease are 36 months, 48 months, or 60 months. Again, the longer the lease term, the lower the monthly payment will be. The key difference between a $1 Buyout lease and an FMV lease is at the end of the lease term, you have the option to buyout the remainder of the copier lease for a nominal fee, usually $1 (aka where the name $1 buyout comes from). Essentially, with this type of lease you’re financing the purchase of the equipment over the lease term.
A $1 Buyout lease is best suited for small businesses that intend to keep the copier long-term and want the eventual ownership, as this type of lease acts more like an installment loan.
Finding the Perfect Fit: Key Considerations for Office Copier Leases
Just as important as it is to choose the right type of office copier lease for your small business, it’s also important to make sure you’re selecting the office copier that’s the best fit for your business. When choosing which office copier to lease as well as what type of lease to opt for, keep these considerations at top of mind when evaluating your options:
- Your Budget: Determine how much you can comfortably allocate to a monthly copier expense.
- Your Printing Needs: Identify the essential features your business needs. Do you need color printing, scanning, faxing, duplexing (double-sided printing), or advanced security features? How many pages do you estimate you print per month on average (black and white and color)? This will help you determine what type of printer or copier will best suit your printing needs. For many small businesses, a robust desktop printer or multifunction printer (MFP) can handle their monthly print volume while checking all the boxes of their needs, and is more affordable than your typical office copier.
- Lease Term: Consider how long you anticipate needing the equipment or when you may want to look at a newer model. Most car leases are shorter term (~ 3 years) because the allow you to have the car for a decent amount of time while still giving you the benefit to upgrade when newer models are available. Similarly, shorter office copier lease terms offer more flexibility for upgrades, while longer terms may result in lower monthly payments but can lock you into older technology. It’s also important to think about your business’s future growth. Will your printing needs likely increase? Decrease? Choose a lease that can accommodate potential expansion or consolidation.
- Service and Support: Inquire about if the printer service and repair maintenance is included in the lease agreement, or what you are options are to have an accompanying managed print services copier contract that is coterminous with your lease. Prompt and reliable support is crucial to minimize downtime and keep your business running smoothly. It’s also important to keep in mind that not all providers are created equal. When choosing a managed print services provider or copier vendor, it’s important to ensure that they have experience working with small businesses, offer personalized and responsive customer service, and offer transparent lease terms without hidden or bundled fees.
With that being said, some questions you can ask potential providers when evaluating your options to get a feel for if they’re a good fit for to partner with include:
- What are the different lease options available and what are the terms for each? What would you recommend based on my needs?
- What is the monthly payment? Does this include any service, supplies, or a monthly print allowance for the copier (maintenance, toner, etc.)? If not, can you provide a coterminous MPS contract?
- What are the overage charges for exceeding the monthly print allowance?
- What are the penalties for early termination?
- What is the process for service and support? What is the typical response time?
- What are the end-of-lease options?
Choosing the right office copier and accompanying lease is a significant decision for your small business. By carefully evaluating your needs, understanding the different lease options available, and asking the right questions, you can find a solution that provides the technology you need without breaking the bank. Don’t rush the process – take the time to find your perfect fit and empower your business for efficient and cost-effective printing!
Need help finding your perfect fit? Parmetech specializes in helping small businesses find the right office printing equipment and lease options that will work best for their needs and budget. We are also a full-service managed print services provider. If you’d like to discuss your needs or learn more about our offerings, please reach out and we’d be happy to help! You can call us at (800) 727-6383, email us at info@parmetech.com, or connect with us through our website form.
