O'Level  &

Leasing might be the best because it is less expensive for the business. For example, the firm doesn’t need a large amount of money to use the new vehicle as they are not purchasing it, but they are just borrowing it. Plus, the care and maintenance of the vehicle is done by the leasing company. Therefore, the start-up business can pay less to use the asset, and this is beneficial for them as start-ups don't have so much capital, which means they can save money for other setting up costs.

However, because they are just borrowing the vehicle, it means that they don't have ownership of it. For example, if the business needs cash, it cannot sell the leased equipment because it doesn’t own it. This reduces flexibility compared to buying.

Personally I think that leasing is not the best. Because even though the cost of borrowing the vehicle is lower than the cost of buying the vechicle, but the start-up firm will have to pay monthly payment to the leasing company. And because they are start up, they might not be able to make a profit and pay the money back to the leasing firm.