Making the right financial decision for your company long-term based on the leasing options available is crucial. So, FMV vs EPP: Which is a better option for your business? Let’s discuss.
When I visit with potential customers, I know this: Every organization handles, prints, and distributes documents a little differently. With that in mind, it’s important that I dig deep to truly understand their environment to help them maximize their total cost of technology ownership.
The same holds true when it comes to finances.
Every organization has its own unique needs. Once a proposal is presented, any potential buyer will have a slew of very valid questions. Chief among them: “Should we lease or purchase our copier?” If a potential buyer is wanting to explore leasing opportunities, I present two primary options, both of which have advantages depending on a variety of factors: Fair Market Value (FMV) Leasing, or Equipment Purchase Placement (EPP) Leasing, aka Lease to Own.
The question that usually comes next: “Which option is better for me?”
This is what makes clearly understanding their business needs so important — the lease type I recommend will vary depending on each company’s unique environment. A copier/Multi-Function Printer is a big purchase. Making the right financial decision for your company long-term based on the options available is crucial. So, FMV vs EPP: Which is a better option for your business? Let’s discuss.
What are FMV and EPP Leases?
- A FMV Lease is an agreement in which the lessee agrees to use the equipment for a pre-arranged time period for a fixed monthly payment. You may associate a FMV Lease with leasing an automobile. At the end of the term, you can simply “start over” with a new lease agreement with new, updated office equipment.
- An EPP Lease is an agreement in which the lessee owns the equipment at the end of the lease term. This type of lease is typically utilized when a business plans to keep the equipment for a long period of time, and/or technology obsolescence is of little concern. One note: Under an EPP Lease, the lessee does not have to pay the annual property tax bill that comes under an FMV Lease.
What’s a better option for YOU? Three factors to consider.
1. What is Your Business Size?
Are you a small church, with only one or two users and one device? Chances are, your monthly volume will be low. The “wear and tear” of your copier will be minimal. It may make more sense to move forward with an EPP Lease so that at the end of your term, you can continue to run the same machine for 10 (maybe even 15!) years.
If you have dozens of users and your monthly print volume is high, it might be a better business decision to utilize FMV and start over with new equipment at the end of your lease term.
2. How Will the Copier be Utilized?
Technology changes fast these days. Functionalities and capabilities on copiers evolve quickly in ways that can help expedite, improve, or even automate routine business processes. So, how do you utilize your copier every day? Are you merely printing weekly bulletins? Or is your organization utilizing complex document workflow processes that you anticipate will evolve with new technology?
If obsolescence is of any concern now or in the future, FMV may be your best option.
3. What’s Your Growth Forecast?
In other words… do you intend on adding more employees (aka copier users) in the next year, five years down the road? If your business is growing, you may need to upgrade to a bigger, faster device, add additional devices, or rethink your print fleet altogether.
In this case, owning a 5-year-old copier is perhaps not in your best interest. Think FMV.
These are simply three factors to consider when it comes to leasing, but we’d love to continue the conversation with you and your unique business environment. If you’re interested in learning more about how Datamax can help you maximize productivity and your ultimate return on technology investment, let’s visit!