Pros and Cons with Buying, Leasing or Renting Office Equipment

Whether the equipment (photocopier, fax) is used in a branch office or for internal operations, reliability and availability are two primary requirements. When a copy is needed, or a fax has to be sent, the equipment should be in good working order without personnel having to stand in line and wait.

Before you determine the mode of acquisition, it's extremely important that you select the proper equipment based on the need. For copiers, the copy volume and frequency of use, as well as the number of end users, must be considered. A copier that is constantly used to make a few copies by many different people vs. a copier that is used to make larger runs by few people will have different service profiles. Repair technicians report more common problems such as persistent paper jams with machines utilized by manydifferent users.

Do not be swayed by copy volume capabilities quoted by office equipment salespeople. A machine that has the ability to do 60,000 copies monthly vs. 50,000 copies may not be a better machine. I ordinarily take the recommended capacity and cut it in half. A more important number to consider is the copies per minute (CPM).

Ultimately, whether you purchase, lease or rent, the decision should be based on the cost per copy and service. Cost per copy considerations include equipment, supplies (including paper) and service costs. The service component includes guaranteed uptime, response time and number of copies between service calls.

Today's technology makes it easier to acquire reliable copier and fax machines. In fact, refurbished copiers can be a good proposition,particularly when refurbished and warranteed by the manufacturer. Used equipment with reasonable volume is also a consideration. Technology has also lowered the cost of fax machines to the point that it may be more economical to replace rather than repair them.However, though copier maintenance agreements are still necessary, they do not have to be onerous. These annual contracts are high profit margin items for office equipment dealers. It could turn out to be very costly if you sign without reading the fine print. These agreements often favor the seller and do not cover the needs of the buyer. As with any agreement, they are negotiable. Ensure that it spells out what you require, specific performance conditions and levels of performance.

Many office equipment acquisitions are determined by the bank's financial treatment or policy. In general, copy machines intended for a useful life greater than four years are usually purchased. If cash flow and ownership are concerns, leasing is a good option. Rentals can fill emergency and short term needs.

First published on BankersOnline.com 3/19/01