Renting your coffee machine, EFTPOS or copier? Price the contract before you sign

The sales rep makes it sound easy: no big outlay, one small weekly payment, servicing included, sign here. And for some gear that really is a good deal. But a commercial equipment rental agreement is finance in a friendly jumper. Someone is funding that espresso machine, EFTPOS terminal, photocopier, sign or solar setup, and you’re paying them back with a margin on top, usually for years.

You wouldn’t take a business loan without comparing it. Give the rental contract the same treatment. This guide walks you through pricing a rental in dollars, the clauses that bite, and how to set it beside buying the gear outright or with a loan.

Why is a rental agreement really a loan?

Strip away the wording and look at what happens. A rental company buys the equipment and lets you use it. You promise a fixed run of payments, often for three to five years. At the end, you might hand it back, keep renting, or buy it at a price the rental company sets.

That’s a finance arrangement, just packaged differently. The company’s funding cost, its servicing budget, its risk of you going under and its profit are all baked into the weekly figure. None of that is sinister. It simply means the weekly number tells you almost nothing on its own. A small payment over a long term can add up to a surprisingly large total.

Rentals are commonly sold at the counter by the equipment supplier, which is exactly why owners skip the comparison. You came in to choose a machine, not shop for finance.

How do you price a rental agreement in dollars?

Use the same yardsticks you’d apply to any loan offer. Our guide to the total cost of finance explains them in more depth, but for a rental you need five numbers.

1. Total payments. The weekly or monthly payment multiplied by the full term. A weekly payment over five years is roughly 260 payments, not “about fifty bucks”.
2. Upfront and ongoing fees. Documentation, installation, delivery, insurance and any annual admin or “account” fees.
3. End-of-term cost. What it costs to keep the gear, return it (freight, removal, make-good) or roll onto a new contract.
4. Exit cost. What you’d owe if you closed the business, moved or upgraded at month 12, 24 or 36.
5. What you own at the end. Usually nothing, unless you pay to buy out the equipment.

Put GST on the same footing in both columns. If you’re GST-registered you’ll generally claim the GST back either way, so comparing GST-exclusive figures keeps things clean.

Rent or buy: how do the two options stack up?

What you’re weighing	Rental agreement	Buying (cash or a loan)
Upfront cash	Little or none	Full price, or a deposit if financed
Total cost over the term	Usually well above the purchase price	Purchase price plus finance costs
Who owns it	The rental company	You (subject to any lender’s security)
Servicing and repairs	Often bundled in, so check what’s actually covered	Your cost, after any warranty
Ending early	Often all or most remaining payments	Repay the balance plus any early repayment fee
End of term	Return, roll over, upgrade or buy out	You keep it, sell it or trade it in
Tax	Payments are generally an expense	Depreciation, and possibly Investment Boost on new assets
Upgrading	Often easy, sometimes into a fresh long contract	Sell or trade in and buy again

On tax, Inland Revenue’s Investment Boost lets businesses claim a 20% deduction on new (or new to New Zealand) depreciable assets first available for use on or after 22 May 2025, on top of normal depreciation. That’s available to the owner of the asset, which in a straight rental is the rental company, not you. How that shakes out for your business is a question for your accountant, but it belongs in the comparison.

Which clauses deserve a second read?

Rental contracts are typically standard forms written by the rental company. These are the clauses that most often surprise owners later.

The term and the “non-cancellable” wording

Look for phrases like “minimum term”, “non-cancellable” or “all rentals for the remainder of the term become payable”. If the contract says that, closing your café in year two doesn’t end the payments.

Automatic rollover

Some contracts continue month to month, or renew for another term, unless you give written notice within a set window before the end date. Put that window in your calendar the day you sign.

Two contracts, two companies

The supplier who sells you the service (EFTPOS processing, printing, coffee beans) may not be the company you owe rent to. If the service supplier disappoints or folds, the rental payments to the finance company often continue regardless. Ask who you’ll actually be paying.

Faults, servicing and replacement

The Consumer Guarantees Act mainly covers goods ordinarily bought for personal or household use, and Consumer Protection’s guidance notes that businesses can contract out of it if it’s agreed in writing and fair to both sides. So check what the contract promises if the machine breaks: response times, loan units, and whether you keep paying while it’s out of action.

Security on the register

A lease of goods for more than a year can be registered by the rental company on the Personal Property Securities Register. That’s normal, but it will show up when a future lender searches your business, so know what’s registered and why.

Standard-form business contracts aren’t a free-for-all. Since August 2022, unfair contract terms rules have covered standard form “small trade contracts” between businesses where the trading relationship is worth up to $250,000 in a 12-month period. The Commerce Commission is the body that can take action on an unfair term. Treat that as a backstop, though, not a reason to sign without reading.

When does renting genuinely make sense?

Renting earns its keep when:

• the gear dates fast and you want to upgrade every few years (some point-of-sale and tech kit);
• servicing is complex and genuinely included, with response times written down;
• you’re testing a new line, site or season and don’t want to own the equipment if it flops;
• the total cost is close to buying once you count servicing you’d otherwise pay for.

Buying usually wins when you’ll use the equipment for most of its working life, it holds resale value, or the rental total is far above the purchase price. A quick way to see where you sit is to run both options through the offer comparer.

If you’d rather own the gear and need funding to do it, check what you could get. It takes about a minute and doesn’t touch your credit file.

What does the comparison look like in real numbers?

Illustrative example. A Nelson café owner is offered a commercial espresso machine and grinder on a 60-month rental at $410 a month plus GST, with a $250 documentation fee and servicing included. At the end, the café can return the machine or buy it at the rental company’s valuation. The same package costs $14,500 plus GST to buy.

Measure (GST-exclusive)	60-month rental	Buy with a 36-month equipment loan
Upfront cost	$250 fee	$0 deposit, $350 establishment fee included below
Total paid over the term	$24,850	$17,900 (illustrative lender quote)
Cost per $1,000 of equipment value	About $1,714	About $1,234
Servicing	Included	About $600 a year, budgeted separately
Exit at month 18	Contract says remaining 42 payments due: $17,220	Repay remaining balance plus early repayment fee
Owned at the end	Nothing, unless bought out	The machine, with resale value

Even after adding five years of servicing (about $3,000) to the loan column, buying comes out nearly $4,000 ahead and leaves the café owning a machine it can sell or trade in. The rental might still suit an owner who expects to upgrade in two years and values bundled servicing above everything else. The point is to make that choice knowingly, with both totals on the table.

What should you ask before signing?

Take this shopping list to the counter:

• What’s the total of every payment over the full term, including GST?
• What fees apply at the start, during the contract and at the end?
• Can I end the contract early, and what would I owe at months 12, 24 and 36? Please put it in writing.
• Does the contract roll over automatically, and what notice do I need to give?
• Who will I be paying: the supplier or a separate finance company?
• What exactly does servicing cover, and do payments stop if the equipment is out of action?
• Will you register a security interest on the PPSR?
• What would the same equipment cost to buy outright today?

That last question is the one owners forget, and it’s the anchor for everything else. Our page on early repayment and exit costs covers how to read exit clauses in more detail. If the cash price looks within reach with funding, an asset financier or an unsecured business loan might give you ownership for less.

Would owning the equipment work out better for you?

New gear is exciting, and the “small weekly payment” pitch makes it easy to say yes on the spot. Before you do, it’s worth knowing whether funding the purchase yourself would leave you better off. That’s a question we answer for business owners every week, from café fit-outs to workshop machinery.

Our enquiry form takes about 60 seconds and there’s no credit check when you first enquire, so nothing lands on your file for asking. We don’t send your details to a pile of lenders, so you won’t spend the afternoon fielding calls from strangers. A real person reads your situation, including what you’re buying and what the rental offer looks like, and phones you to talk through the stalls that fit. Please fill the form in accurately: honest figures on turnover, trading history and the equipment cost mean the first option we bring you is far more likely to be the right one.

See if you qualify →