UK companies still remain sceptical about leasing their I.T. equipment even though photocopiers, cars and many other items are a firm lease favourite.
Companies need to change their technology more often these days; a great deal of focus is put on technology due to ease of access through clouds apps such as Gmail, Salesforce, Twitter, Yammer, Mozy file storage and many more. Just about everything is geared around the users’ experience and this makes them more demanding when it comes to their employers’ offering. User experience is driving business technology, if employees are unsatisfied, they just self-provision. The average employee is constantly bombarded with cloud apps that make even file sharing and storage almost seamless.
With the speed of technology changes, increase in competitor technology and growing cloud app availability, leasing is becoming essential to afford the latest technology now.
Leasing has changed a great deal from the copier rental agreements 15 years ago, they’re more transparent, have decent rates and as long as you go with a reputable firm, the cost savings become a no-brainer! Finance directors are becoming increasingly aware that under-investment in I.T. can seriously impact their companies’ competitive advantage.
Bank loans or finance agreements can be restrictive; limitations on what can be funded often mean solutions still have to be part funded by the business.
From a financial point of view, leasing is becoming far more attractive; with competition between the specialist IT lease companies at an all-time high, rates, service and breadth of fundable technologies has increased greatly. Lease payments can also be offset against taxable profits or counted as an operating expense. Finance companies tend to offer flexible payments, which can also suit customer cash flow because of seasonal changes in trade.
Being able to change or upgrade your hardware before the end of its lifecycle is a major benefit and it is also possible to upgrade and trade up equipment before the end of the lease.
The WEEE directive has been brought upon us over the last few years and the disposal of your I.T. assets are no longer inexpensive, leasing your equipment gives you the option to simply return the equipment when your lease has ended or when you choose to upgrade. Alternatively your may wish to keep the items after your lease agreement expires for a nominal cost.
Dell, HP, Fujitsu, Siemens, IBM and Lenovo are just some of the vendors offering leasing as an option to acquiring their hardware and you can usually piggyback software solutions into your agreement depending on the costs.
Although it has many benefits, leasing on the whole can be more expensive than purchasing equipment in terms of overall financial outlay.
Points to note when leasing equipment:-
- Ensure you will have clear notification for the expiry of lease equipment 90 to 120 days before the date due.
- Ensure you are clear as to the costs and terms of continuing to hold equipment after the end of the lease date, whether you intend to continue leasing the equipment, or due to unforeseen circumstances cannot return items on the date stated.
- Ensure there are procedures for tracking lease equipment and assets within your company, including peripherals.
- Ensure there are procedures for storing licences and manuals that will need to be returned.
- Have a clear understanding which party is responsible for data removal on returning those items affected by legislation.
- Be clear on what condition equipment must be returned in, and what “fair wear and tear” will cover.
- Be clear on which party will pay for the return of leased equipment.
- Negotiate flexible renewal terms that include fair market value, or reduced renewal rates.
- Ensure a clear understanding of how fair market value will be calculated, especially in the event of purchasing equipment at the end of a lease.
- Ensure a clear understanding of the terms of any upgrades.
Ask one of our account managers about leasing your next purchase.