Buying is useful for medium or big sized entities that are capable of funding the assets and blocking amounts in assets without effecting their operational profitability.
Leasing is advantageous for small-sized and start-up entities as they can enjoy the right to use high costing assets without making the initial investment.
#1 Meaning
Buying is a complete ownership transfer of a product/asset.
|
Leasing is getting the ownership only to use the product/equipment
|
#2 Ownership
Full ownership.
|
Ownership to use.
|
#3 Exchange Value
A lot.
|
Much less.
|
#4 Flexible Terms
No flexibility.
|
A lot of flexibility.
|
#5 Monthly obligation
No.
|
Yes.
|
#6 Useful to
Medium to big business owners.
|
New business owners.
|
#7 Useful because
You pay an amount and you own it; there are no discrepancies.
|
You pay monthly/annually to use it.
|
#8 Tax deduction
You can deduct the full cost of the purchased asset.
|
It can be shown as business expenses and can get tax benefits.
|