If you choose to lease you will end up paying more in the end than if you purchase the processing solution from the start. Let’s say you find a merchant account provider who will charge you $200 to purchase the real-time Internet credit card processing solution. Or they will lease you the same solution for $20 each month for the next 48 months. If you do the math, in the end you will end up paying $960 for that solution if you chose to lease it for 48 months. That’s $760 more than if you purchased the solution up front for $200. Also, be aware the above calculations do not include your state sales tax on the lease or the amount charged for the damage/loss waiver. With these two additional costs you can end up paying as much as $20 more. Another thing you may not realize is that the 48 month lease is not cancelable, so even if you go out of business you may still have to pay on that lease until the 4 years (48 months) is completed.
Not all leases are for 48 months, some providers offer 12, 24 and 36 month leases. However, the shorter the lease time, the higher the monthly lease cost will be.
Your credit rating will also have an effect on the amount you pay for a monthly lease. Those with bad or no credit will most always pay more than those with good to excellent credit. Check with the merchant account provider for details.
Needless to say, purchasing a processing solution is by far the best way to go. And another nice incentive is that it’s 100% tax deductible.
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