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Among the many components of running your business is making sure your premises are kept secure. Commercial security systems are vital to protecting assets and keeping visitors safe, but they do represent an additional cost you’ll have to handle.

Many businesses choose to purchase a commercial security system, while others opt to lease. Each has its advantages and drawbacks, which we’ll cover here.

Advantages Of Buying Commercial Security Equipment

buying vs. leasing security system

If you choose to purchase a security system for your business, you pay for the entire cost of the equipment up front. After that, you only pay for maintenance and monitoring.

Purchasing your whole system upfront can be beneficial in the following ways.

Lower overall price

The primary advantage of buying your security system is the fact that its overall costs after installation and fees are typically lower than the cumulative cost of leasing.

Many leases do include an option to buy the equipment after the lease is over, but the end cost will ultimately be higher than it would be to buy it all up front.

Lower monthly costs

In addition, the monthly costs of monitoring your security system will be lower than the price of leasing.

With a lease, the costs of maintenance, monitoring, and payments toward the equipment are all included in your monthly payments, whereas the payments you’d make with your own system would only have to cover monitoring.

Option to switch monitoring services

Purchasing also gives you the freedom to switch monitoring services as needed.

If the company who initially sold you the equipment ends up providing subpar service, it’s usually fairly easy to switch to a new monitoring service while keeping your equipment. Although you may face fees for switching, it’s still fairly cost-effective in most cases.

That said, it’s worth noting when you buy a security system that some companies include a mandatory contract to purchase their monitoring services as well. If this is the case, you may not be able to switch until the contract is up. Also, if you decide to switch, you’ll need to make sure the installed equipment is “unlocked” to allow your new provider access to the system.

Tax benefits from asset depreciation

A final benefit of buying a commercial security system comes in the form of tax advantages.

Commercial assets depreciate over time, and the IRS allows businesses to deduct the depreciation of their assets from their taxable income. For businesses with multiple depreciating assets, this can greatly reduce their tax exposure.

One of the interesting things about this benefit is the fact that the more complex and expensive your system is, the greater the annual benefits will be from depreciation. A customized full-service commercial security system can yield substantial tax benefits year after year.

Advantages Of Leasing Commercial Security Equipment

Purchasing a commercial security system has its benefits, but so too does leasing, especially for smaller businesses with limited revenue.

Lower upfront cost

When leasing a commercial security system, the upfront costs to install the equipment are typically a fraction of the total cost of the system as a whole. This means you only have minimal disruption to your cash flow upon installation, whereas buying would mean a large spike in your business expenses.

Consistent monthly payments

Another advantage of leasing security equipment is the fact that your monthly payments will remain consistent over the entire term of the lease. This is because the costs of maintaining the equipment should be included in the monthly fee.

So, if something goes wrong with the system in any way (or if it just needs a routine maintenance check), you won’t have extra maintenance costs on top of the lease payment. The end result is easy-to-anticipate monthly overhead without unexpected costs.

Regular maintenance

The company from whom you lease your equipment is still technically its owner.

While this does have some drawbacks, it also has the advantage of making them responsible for continued maintenance. If something goes wrong, they should handle it themselves. This removes a fiscal burden from your business in that you don’t have to worry about lengthy downtimes or high maintenance expenses.

Tax benefits from lease payments

Leasing also affords tax benefits in the form of lease payments.

IRS tax code allows businesses to deduct their lease payments from their taxable income, and that can potentially put them in a lower tax bracket.

Making The Choice To Lease or Buy Commercial Security Systems

When choosing between buying and leasing a commercial security system, it’s important to weigh out how the different advantages and disadvantages will affect your business.

For instance, if you have a lot of capital to play with, buying would make more sense since you can handle the initial costs. If you don’t have that kind of funding, then leasing would spare you the high upfront expense.

In terms of the tax advantages, choosing the one that will benefit you more depends on the scale of the equipment. A basic installation probably won’t have the same level of benefits from depreciation that a larger, more comprehensive system would have, potentially making it more advantageous for a smaller business to lease rather than buy.

The choice ultimately comes down to the size of your business, the level of security you need, your tax situation, whether a low initial cost would justify higher monthly payments, and so forth.

Consulting with your financial planner, CFO, or another expert (as well as with commercial security providers) can help you make the best choice for your business.

Learn more about commercial security systems or get in touch with Butler Durrell expert to discuss your security needs.