Lease vs Finance: Which One is Right for Your Business?
If you’re running a business and planning to finance equipment, vehicles, or other assets, one key question comes up often:
Should I lease or should I finance? Is there even a difference?
At Thrift Capital, we help business owners across industries make this decision every day. The right option depends on your cash flow, growth plans, and how long you expect to keep the asset.
This guide breaks down the pros and cons of leasing vs. financing to help you choose the best path for your business.
What Is Leasing?
Leasing is essentially renting the asset for a set period. You make monthly or quarterly payments, but the lender retains ownership. At the end of the lease, you may return, upgrade, or purchase the asset—depending on the agreement.
Best suited for:
Businesses needing frequent equipment upgrades
Companies with limited upfront capital
Those seeking off-balance-sheet finance options
Benefits of Leasing:
Lower initial outlay
Easier approval for some structures
Potential tax advantages on lease payments
Greater flexibility to upgrade over time
What Does Financing Mean?
When you purchase a business asset using finance (such as a Chattel Mortgage), your business owns the asset from day one. The loan is secured against the asset, and you repay it over time.
Best suited for:
Businesses looking for long-term ownership
Industries like transport or trades needing equity in equipment
Owners wanting more control over the asset’s use or resale
Benefits of Leasing:
Full ownership = long-term value
Interest and depreciation may be tax-deductible
May be eligible for upfront GST claims (if GST-registered)
Flexible terms and balloon payment options
Lease vs Finance: Quick Comparison
When you lease, you don’t own the asset—you’re essentially renting it over a fixed term. This typically comes with lower upfront costs and greater flexibility to upgrade when needed. Lease payments may also be tax-deductible, depending on your setup. At the end of the lease, you may return the asset, upgrade, or choose to purchase it, depending on your agreement.
When you buy—usually through a Chattel Mortgage—you own the asset from day one. This option often involves a higher upfront cost (unless you structure it with a balloon payment), but it gives you long-term value. You may be able to claim interest and depreciation as tax deductions, and if you’re GST-registered, you could be eligible to claim GST upfront. Unlike leasing, buying gives you full control over the asset at the end of the finance term.
So… Should You Lease or Finance?
Ask yourself:
• Do I need flexibility with cash flow right now?
• How long will I use this asset?
• Is ownership important for my business strategy?
• What are the tax implications? (Speak with your accountant.)
The right structure depends on your business goals—and getting it wrong could cost you more in the long run.
Need Help Deciding?
We’re here to help.
Thrift Capital brokers explain the options clearly—without jargon. Whether you’re buying a truck, leasing medical equipment, or financing a fit-out, we’ll match you with the right lender and structure to suit your business.