Sure, but there can also be tax advantages to buying outright. Germaine to the discussion of SaaS is the fact that, in the case of packaged software, I can either elect to deduct 100% of the purchase price immediately (up to a certain annual dollar limit) or depreciate it over three years. All other things being equal, a $3,000 deduction this year beats a $1,000/year deduction for the next three years.
Well in a lot of places you can discount interest payment against profits - which is why those ghastly debt back buyouts that make money for the banks sort term but saddle a company with unmanageable debt are so popular.
Comments
Well there a lot of tax advantages to leasing compared to buying out right
Sure, but there can also be tax advantages to buying outright. Germaine to the discussion of SaaS is the fact that, in the case of packaged software, I can either elect to deduct 100% of the purchase price immediately (up to a certain annual dollar limit) or depreciate it over three years. All other things being equal, a $3,000 deduction this year beats a $1,000/year deduction for the next three years.
Well in a lot of places you can discount interest payment against profits - which is why those ghastly debt back buyouts that make money for the banks sort term but saddle a company with unmanageable debt are so popular.