Why You Should Lease
Preserve cash flow
Businesses often find that they have to stretch their budgets over a multitude of operating costs such as staff, training, office space rentals, advertising etc. Leasing is a really good way to save cash and redirect it to other areas in your business.
Enjoy a fixed interest rate instead of a floating rate
Unlike a bank loan where repayments and interest rates fluctuate, leasing equipment gives you a fixed rate for the term of the rental period. You pay nothing upfront and with predetermined monthly payments, you can budget better.
Keep your equipment up to date
Leasing ensures that you always have the best equipment, be it desktops, laptops or other hardware without running the risk of investing fortunes in machines that will become obsolete in a few years. At the end of the leasing contract, you can keep pace with technology and upgrade to the latest models.
Sweating assets might save capital or reduce cash demands, but support costs and failure rates are inevitable. As equipment ages, internal components progressively wear out, leading to slower performance. Productivity suffers, and maintenance costs rise. If you are on a lease, you will have the opportunity to trade in the slow and outdated equipment..
When you own assets, the burden to recycle or dispose of the equipment once it eventually becomes obsolete rests with you. With a lease, however, this hassle is taken out of your hands and falls solely on thel easing company. It’s their responsibility to take care of it, not yours.
As the world moves towards technology driven solutions, an organisations readiness to the digitised economy depends on the hardware they have today. By investing in technology, organisations will be investing in growth, improving operations and empowering employees to keep up, and get ahead in a fast-paced world.
However, the real decision often isn’t which piece of equipment is best suited for your needs, but rather how this device will be acquired. With the current economic climate which is characterised by mounting price pressures and a subdued global economy, most organisations find themselves in a predicament. Should your organization buy its office technology or get a business loan?
Leasing is a third viable alternative whether you cash rich or follow a conservative capital expenditure model. With a lease, an organisation can get access to the equipment and tools it needs without the burden of the full, up-front cost.
Initial costs are much lower in comparison to buying the equipment outright. Payments will also be predetermined and fixed, making it easy to balance budgets. When paired with an asset management component, leasing also assists with the essential facilitation of lifecycle management practices.
While the pull of owning equipment is often strong, equipment depreciates in value as it ages and will eventually become obsolete. The resale value significantly drops and you will likely have to sell them at a much lower price than what you paid to acquire them. Equipment leasing employs strategies to ensure the most productivity is gained from the equipment and when its time to upgrade, equipment is always kept up to date.