You must be thinking about the difference between equipment loan and equipment leasing and what it means for you - which option is better
? Well, both have their respective pros and cons and therefore you should consider all the factors before deciding on any one of them. First, unlike equipment leasing, you will have to pay a significant amount as down payment while taking out an equipment loan - this will make a lot of people pick the former - but the thing to remember here is - while leasing, there is no ownership involved whatsoever so that needs to factor in your decision. Second, and this one tips in favor of leasing - the lessor will take the risk of equipment obsolescence, while taking out a loan - the said risk is yours. Thirdly, equipment that you purchase after taking out a loan will appear as a fixed asset in your balance sheet, not so with leasing. Lastly, lease payments are generally spread out comfortably over time whereas the initial down payment and strict repayment schedule of an equipment loan can put strain on the cash flow.