Should you lease or buy IT equipment?

Should you lease or buy IT equipment?

Perhaps these questions answered will help you decide

I haven’t used leasing before
Don’t worry, 8 out of 10 accounting firms, Government bodies and 85% of the Times Top 100 companies all use leasing; you will be joining good company.

What size of transaction can be financed?
The minimum lease value is £1,000 (ex. VAT) but we finance transactions right through to £multi-million projects – The benefits remain consistent regardless of project size.

How long can I lease assets over?
You can lease assets over a term to suit your needs, subject to the asset in question. For instance technology assets are typically financed over 3-5 years although plant and machinery, for example, could be significantly longer. Alternatively leases could be as short as one year, for example software licenses. We can advise you as to the most appropriate term for your specific needs.

What can be leased?
A huge range of assets qualify for leasing and at Systems Assurance we finance everything from IT equipment through to fit out and furniture. It comes as a surprise too many that even software can be leased whilst our projects team are experts in wrapping up all project costs to secure full funding for office moves, shop fits and refurbishments.

How are the rentals treated for VAT?
Rentals attract VAT in the normal way except for Lease Purchase agreements where the VAT is paid in full upfront.

Will I have to pay by Direct Debit?
Like most industries you will benefit from the lowest payments if you pay by DD, but it may also be possible to request an invoice only arrangement.

Will I have to put down a deposit?
No, you only make your first payment when you take delivery.

Will I own the equipment at the end of the term?
A standard Systems Assurance Leasing rental agreement is totally flexible at the end of the initial term. Like many organisations, if you do not wish to return the goods at that point, you can choose to retain the equipment for as long as you want or permanently for a one off charge. However, for you to have gained the best tax advantages during the term you will not legally own the asset.

What happens if the goods become obsolete or need to be upgraded?
One of the main reasons for leasing is to match the rental term to the period of the products productive life. You can at any point in the rental period upgrade the equipment and your payments will alter accordingly. The upgrade path is another benefit of leasing, unlike using cash.

Can I lease the use of software or other non-tangible items?
Absolutely – software is ideally suited to leasing and allows you to pay for licenses etc over time.

What happens if I don’t keep up the payments?
Like any agreement, you are agreeing to make the payments as set out in the document. If you fail to make these payments then steps will be taken to remove the leased goods and enforce the terms of the agreement. A benefit of leasing, unlike most bank facilities, is that there is no link to the broader financial performance of your organisation – As long as the rentals are paid, the facility cannot be withdrawn.

Will signing a lease reduce my ability to gain credit elsewhere?
No, signing a lease through Systems Assurance Leasing will leave all your present lines of credit in place, if anything it may help you gain more credit in the future.

Benefits of Leasing for you
Why pay up-front for assets that typically only provide a return on your investment over time and depreciate throughout?

Here are some key reasons why so many organisations like yours use leasing as an alternative to cash or a bank facility.

  • Significant tax benefits – For private organisations payments are fully tax deductible unlike using cash.
  • Low, fixed payments allow easy budgeting throughout the term.
  • Spread the cost of your purchases in line with the return on the investment.
  • Make your capital work for you – Rather than sink valuable cash into depreciating assets, deploy it elsewhere for higher returns.
  • Totally flexible, a lease allows you to determine the term, how frequently you pay and can be upgraded or changed throughout.
  • Manage obsolescence and refresh assets strategically rather than face unbudgeted large write offs.
  • Make investment decisions based upon your needs and not limited by constrained budgets.
  • Reduce dependency on your primary funder(s) – Your existing credit lines remain unaffected and you will have access to over 20 specialist asset funders.
  • Spread the cost of the VAT which is paid in instalments rather than as a lump sum up-front (excluding Hire/Lease Purchase agreements).
  • Turnkey funding – Build all your costs into the lease to maximise your benefits even further.

Questions about leasing through Systems Assurance Ltd

Can I see a local representative face to face?
Yes. Systems Assurance with cooperation with Bluestone leasing have representatives nationwide and we are always prepared to visit our customers to discuss their needs and requirements. We explain options in plain English, provide transparent and clear pricing and handle all of the necessary paperwork along the way. We have been using Bluestone leasing for over 20 years.

Why might your product be better than someone else’s?
Systems Assurance are truly independent working with their finance company providing access to over 20 specialist banks and funders. Apart from this unparalleled funding panel, ultimately what sets us apart is our approach.

We treat each customer as an individual using our expertise to gain the best solution to suit their specific needs. Customers refused credit elsewhere speak of our willingness to understand their business as the big difference when we successfully secure the funding they need.

What extra confidence can I be given to trade with you?
So far over 20,000 agreements have been arranged for in excess of 12,000 customers through our leasing division that we have been working with for over 20 years.

What financial products do you offer?
Every form of lease is available from Systems Assurance Leasing. Finance leases are extremely popular given their tax benefits but we also provide lease purchase options and operating leases where applicable. We also provide complimentary financial products including cash flow finance (both factoring and invoice discounting) and insurance.

What sectors do you specialise in?
All types of organisations, in both public and private sectors, use Systems Assurance to help them deliver vital projects. Leasing provides them with the essential assets they need more efficiently and cost effectively than using capital.

Do you have examples of projects you have worked on?
We are rightly proud of the value we deliver and you can find numerous examples of the work we have done to help our customers in the case studies section of our website.

Can I speak to someone who has used Systems Assurance for leasing?
Absolutely! We would be delighted to put you in touch with your peers who have used our services. Once we understand your specific needs, we can match you to a customer with similar requirements for you to talk to. Just ask your Account Manager for contact details.

I’m concerned about the small print – will your contract contain any hidden clauses?
Systems Assurance  offer their leasing through Bluestone Leasing, they only transact business using clear, easy to read contracts regulated by the Finance and Leasing Association (FLA) and approved by the Office of Fair Trading (OFT). We make sure all our customers understand the agreements they sign.

Subject to status and satisfactory credit clearance

We would love to hear your views on this...