Businesses often look at leasing as a viable alternative to purchasing high priced equipment. After all, not many small businesses can foot the bill for a $15,000 color copier. But would you lease a $200 cell phone or a $300 cash register? Of course not! So why do some businesses lease $150-$300 credit card terminals?

Most credit card terminal leases involve a 48 month term, and at least $20 a month. That totals $960 in payments! If you buy this same terminal for $160 from Merchant Warehouse, and charge it to a credit card, you could have it paid it off in nine months, with interest, for the same $20 monthly payment.

The Games Lease Providers Play:

Most merchants are given inflated costs to make them more inclined to lease. For instance, some companies will say a terminal, which costs $160 at Merchant Warehouse, costs $500. With no frame of reference, many new customers will simply assume this is accurate, but may not have the cash or credit for that amount.

Also, some companies claim tax advantages to leasing. This is simply false. It is true that lease payments are deductible, but any business purchase is deductible. Would you rather deduct an expense or have the cash in your pocket?

That’s not the only bad news. Here are a few more facts about leasing credit card terminals…

•  Credit Card Machine Leasing Contracts are Binding.

          o Regardless of your circumstances, you cannot terminate the lease before the term ends.

•    You Have to Return the Equipment.

          o After you spend your $960, you then have to return the terminal

•    Leasing Has Costly Strings Attached

          o Terminal leasing companies sometimes continue to charge monthly fees beyond the contract term
              unless you contact them to cancel.
          o Equipment insurance is required for all leases, adding to monthly fees.

Don’t get stuck in a long-term leasing contract while paying far more than necessary to process credit cards.