To buy or lease fitness kit – which is best for your staff gym?
In our June blog, we discussed the benefits of installing a staff gym in the workplace. The benefits outweigh the costs involved, but how the equipment is financed can be a challenge – especially in larger sites.
If the company budget does not stretch to a purchase using existing funds, it can be worth considering a lease to spread the cost into regular monthly payments. This is more straightforward for those with an established credit history - but it is still possible to achieve finance for a start-up business where the Directors are willing to guarantee the repayments.
Shown below are some of the pro and cons of leasing compared to buying outright.
The Pros:
Spreading the total cost over 2 to 5 years eases cashflow and help with forecasting.
Leasing can enable a better selection of equipment, since funds are not stretched from the start.
There are tax benefits to leasing, which is viewed in the same way as a hire, but the equipment can also become an asset (see below).
After the lease term ends, a small additional fee buys title of the equipment.
Ending the lease and starting again with new kit often results in only a small increase in monthly payments.
The Cons:
The overall cost is slightly more than an outright purchase, due to interest charges.
Capital expenses cannot be claimed if the lease is for less than 5 years.
The business is locked into the lease for the whole term regardless of future events that could make it unaffordable.
There is usually more administration involved than with an outright purchase.
For businesses that wish to trial the staff gym idea with a “pop up” facility, there may be an option to hire used equipment for a shorter term, after which a decision can be made to purchase or lease the kind of equipment the staff have enjoyed using.
The minimum term for a “pop up” gym is usually 6 months, but this all depends on the venue and the equipment that is available.
We provide solutions that are innovative and effective, so we look forward to helping you achieve the kind of gym space that your staff and business will benefit from.
