There are multiple advantages in leasing, rather than buying, IT equipment. Technology financing offers flexibility to a business in terms of balance sheets, cash flow, tax planning, and updating technology. Here are five main reasons your business can benefit from technology financing.
1. First comes the upfront cost. You may have to borrow money to cover the purchase of IT equipment. With a lease, you start off with a regular monthly operating expense, and that expense generally won’t change over the life of the lease.
2. Taking out a loan to buy IT equipment means you have to carry that debt on your balance sheet. Lease payments are an operating expense, so your balance sheet looks brighter. Leasing can also provide tax advantages to a business.
3. When it comes to technology, new is usually better than old. Leases can allow for technology refreshing, where you can upgrade or add equipment as your business needs require. If you buy technology equipment, it’s yours for years to come, depreciating in value — and usefulness.
4. Leasing can let you use technology to drive strategic business initiatives, giving you a competitive advantage. If it makes sense to outfit your team in the field with new tablet computers, leasing can quickly make that move possible.
5. End-of-lease options can let you hold onto useful equipment when the lease expires, through lease extensions or fair-market-value purchase options. Or you can move on to a new generation of IT equipment, setting up a new lease.
Any number of parties can help you with leasing IT equipment and technology financing, including capital leasing companies, IT hardware vendors, and IT services firms.