Should you buy or lease your business’ coffee machine?

Choosing the right commercial coffee machine for your business isn’t just about finding the perfect model — it’s about deciding how to finance it. Should you buy the machine outright or opt for a lease?

This blog aims to help you understand, the pros and cons of each approach, and guide you toward the best option based on your business goals, investment level, and machine maintenance requirements.

How does leasing a coffee machine work?

Leasing a commercial coffee machine allows you to spread the cost over a longer period, typically three to five years. Instead of a large upfront payment, you’ll make regular payments to a leasing provider who owns the machine.

The lease process involves credit checks and paperwork, but the leasing provider handles the financial side, allowing you to manage cash flow more efficiently.

Costs Involved:

• Upfront: Usually minimal, covering initial setup fees or first payment.
• Ongoing: Monthly or quarterly payments. Rates can be offset against corporation tax, allowing up to 19% savings.
• End of Lease: Options to purchase, re-lease, or return the machine.

Pros of Leasing a Commercial Coffee Machine

Leasing a commercial coffee machine is the most common finance option we provide for our customers due to the removal of the large upfront cost. Benefits of leasing include:

• Cash Flow Friendly: No significant upfront costs, making it ideal for businesses with limited capital or fluctuating cash flow.
• Tax Benefits: Lease payments can often be offset against taxes, providing financial relief.
• Flexibility: Option to upgrade, purchase, or return the machine at the end of the term. This is beneficial for rapidly growing businesses that may need a different machine in a few years.
• Support and Maintenance: Often included in the lease, reducing service worries. This is particularly helpful for businesses without in-house maintenance teams.

Cons of Leasing a Commercial Coffee Machine

Leasing isn’t for everyone! There are some potential downsides to consider, and a credit check that some businesses may not be able to pass. Cons include:

• Higher Long-Term Cost: You may pay more than the machine’s value over the lease term.
• Commitment: You are locked into a contract. Early exit may incur additional fees.
• No Ownership: Unless you opt to buy at the end, the machine remains the property of the leasing company.
• Credit History Requirements: Leasing may not be suitable for new businesses with little credit history.

Who Should Choose Leasing?

Leasing is typically better suited for small to medium-sized businesses, such as independent cafés, restaurants, or corporate offices that need a commercial-grade coffee machine but prefer to avoid a large upfront investment. 

It’s also ideal for businesses expecting to grow or change their coffee equipment needs within the next few years. Leasing is a good choice when cash flow is a primary concern, and the business prefers predictable, spread-out expenses.

 

How much is it to lease a commercial coffee machine?

Costs vary based on the machine model and lease length. Typically, a three-year lease will have higher regular payments than a five-year lease, but both options are designed to keep payments manageable.

For example, a high-end espresso machine might cost £150-£250 per month on a lease. You can typically expect a lease to work out between 10 and 30% more expensive than buying the machine outright, as you pay for the privilege of spreading the cost. It’s advisable to compare rates from multiple leasing providers to get the best deal.

 

Would you be better off buying your coffee machine?

Purchasing a coffee machine outright involves a one-time payment, after which the machine belongs to you. This approach can be more straightforward for businesses with sufficient capital and those wanting complete control over their equipment.

Costs Involved:

• Upfront: Full payment for the machine.
• Ongoing: Maintenance and servicing costs are your responsibility.
• Ownership: The machine becomes a business asset, and VAT can be reclaimed.

Pros of Buying a Commercial Coffee Machine

• Ownership: The machine belongs to you, allowing flexibility in maintenance and resale.
• Long-Term Savings: No interest or additional fees, resulting in a lower total cost over time.
• Tax Benefits: VAT can be reclaimed, and the machine can be treated as a depreciating asset.
• No Contractual Ties: Freedom to choose your suppliers and service providers.

 

When buying your machine wouldn’t be the best choice

• High Upfront Cost: Can strain cash flow, especially for new businesses.
• Depreciation: The machine’s value decreases over time.
• Maintenance Responsibility: As the legal owner, you are fully responsible for repairs and servicing.

Who Should Buy their Coffee Machine?

Buying a coffee machine outright is best suited for established businesses with stable cash flow, such as high-volume cafés, hotels, or corporate dining services that have the capital to invest upfront.

It’s ideal for companies that want complete control over the equipment and plan to use the machine long-term. For businesses looking to add an asset to their balance sheet or those with specific machine requirements, purchasing can be the more cost-effective choice.

 

Is There Another Option? Free On Loan Explained

You may have come across the “Free On Loan” option when considering coffee machine finance, where a supplier provides a coffee machine at no upfront cost in exchange for purchasing other products, such as coffee beans or maintenance services, at a higher price. While this might sound appealing, we do not provide nor do we recommend Free On Loan agreements. Here’s why:

How Does Free On Loan Work?

• No Machine Cost: The machine is supplied without an initial charge, which can seem attractive for businesses with tight budgets.
• Commitment to Consumables: In exchange, you agree to purchase a set amount of coffee or other consumables from the supplier at higher rates.
• Contract Terms: Typically involves volume commitments and set contract durations.

Why We Don’t Recommend Free On Loan

• Hidden Costs: While the machine itself is “free,” the real cost is embedded in the inflated prices for coffee and other consumables, often making it more expensive in the long run.
• Limited Flexibility: You’re tied to purchasing from the supplier, which restricts your choice and may prevent you from finding better deals or quality elsewhere.
• No Ownership: There is no option to own the machine, and you remain dependent on the supplier for the duration of the agreement.
• Unstable Agreements: If you don’t meet the minimum volume commitments, you could incur additional charges, leading to financial instability.

Best Avoided

At Bridge Coffee Roasters, we believe that Free On Loan agreements do not provide a fair balance of value for our customers. We advise businesses to consider leasing or buying options that offer better financial clarity, flexibility, and long-term benefits. Our focus is on providing solutions that are win-win for both our customers and us, rather than tying businesses into restrictive contracts with hidden costs.

Lease or buy your coffee machine with Bridge Coffee Roasters

At Bridge Coffee Roasters, we offer flexible options to suit your business needs, whether you choose to buy or lease. Leasing provides manageable payments and maintenance support, while buying offers complete ownership and potential long-term savings. 

We’ll support you with barista training, servicing, and maintenance regardless of your choice.

To learn more about making the right choice for your business, download our Complete Guide to Buying a Coffee Machine.