When companies are faced with the decision of improving their current technology or operational assets, one of the greatest challenges presented is: ‘Should we lease or buy?’
Buying at once may look attractive, however, leasing out of equipment, and, in particular, IT equipment leasing has numerous benefits. The top seven reasons why leasing options for equipment are more beneficial to companies are listed below:
1. Improved Cash Flow
Cash flow is one of the impacts of leasing equipment because it allows the business to spread the cost over time. Rather than one major payment made at once, leasing offers a series of regular and manageable payments.
This is very advantageous especially for IT equipment leasing because the costs are so high thanks to the expensive structures needed and the incessant need for technological upgrades.
2. Up-to-date Technology
To keep up with the competition, companies are also required to keep abreast with the technological changes. The IT equipment leasing is aimed at giving the companies the most current technology without straining their finances on amassing equipment. At the end of the lease period, it is possible to exchange worn out and less functional devices for more upgraded ones.
3. Deferred Costs of Maintenance
When the leasing is provided by many providers they take care of the repairs and upgrades which means the businesses do not have to incur costly service expenses. IT systems, in particular, are prone to such issues since they are expected to provide continuous performance over time and therefore support is likely to be a non-ending process.
4. Tax Benefits
In recent times there has been an increase in the utilization of leasing as an innovative method of acquisition of assets. A firm which adopts leasing as a method of asset acquisition is able to do so without straining its working capital. Therefore, for most companies that utilize leasing of Information Technology equipment, this tends to result in significant savings in the long run since the company does not have to carry out work capital intensive equipment purchase.
5. Preserving Working Capital
In addition to this, the companies still have room for equipment financial leasing since it allows them to conserve their working capital and put that money into other vital areas like marketing, product development or even growing the business.
For example, this approach for such IT based economies enables investment in additional software and cybersecurity or other tech worries but there is still room in hardware which the company chooses to lease.
6. Flexibility and Scalability
Leasing gives companies flexibility. Leasing makes it easy to scale your business as it expands or changes. Do you require any other equipment? Your lease can be modified appropriately. Leasing IT equipment is especially appropriate for this since technological needs often change in response to market demands and corporate expansion.
7. Protection from Technological Advancement
Every time a business purchases new equipment, there is a risk of having equipment that is old or out of date, which may affect work. Equipment Leasing ensures this does not happen as organizations can always upgrade to the most recent version. This is most heightened in IT equipment leasing since such technology is fast outdated.
Conclusion
Although it is easier to comprehend the process of acquisition of equipment than leasing it with all its benefits. The latter has benefits that may be value adding in terms of operational efficiency and flexibility in finance management.
In particular IT equipment leasing helps minimize maintenance expenses, provides access to current technology and allows companies to save money whilst improving cash and working capital management. When you apply leasing to your capital’s equipment needs, you are better able to adapt to the ever advancing and fast growing business environment.
For more information about equipment leasing in support of growth of your business, visit us today and find out more about equipment leasing from us at CMS Funding!
