Financing IT- how leasing can help

With the global economic climate looking uncertain, and the consequences of the credit-crunch becoming apparent, as a small business you may be faced with having to make tough financial decisions about where and how to allocate your budgets.  Financial planning is a key factor in surviving a potential downturn, helping small and medium businesses to assess cash flow and assign budgets effectively.

With most businesses reliant on some form of technology for their day-to-day operations, IT is an important area to invest in.  However with SMBs having to look closer at spending, IT purchases might be low on the list of priorities.  In such cases leasing is one method of funding IT equipment purchases, by keeping money in the business rather than tying it up in depreciating assets.

There are a number of reasons why leasing can work for you:

Technological flexibility

Leasing gives small businesses the ability to meet changing technology needs quickly and easily, without being tied to specific purchases and their individual lifecycles.

Financial flexibility

Leasing conserves cash reserves by enabling you to acquire the equipment without making a substantial lump sum payment.  It may also offer tax advantages in some cases as leasing payments may be offset against tax. 

Managing cash flow

Payments are fixed over the agreed term of the contract, allowing you to be protected from changing interest rates, enabling accurate budgeting and cash flow projections.

Protection against depreciation

With technology becoming more advanced every year, it’s important to ensure you are always getting the best from your IT.  Leasing can protect small and medium sized businesses from equipment devaluation or obsolescence and, if relevant, a piece of equipment can be leased for a specific contract.

Flexibility at the end

Leasing doesn’t always mean giving the equipment back when the lease is up.  At the end of the lease term, customers often have the option to purchase the equipment, renew the lease for a specific period of time or discuss a new equipment upgrade.

Many IT vendors now offer smaller businesses a variety of financing options, including leasing packages. However, since all businesses are different and their needs vary, there is no one-size-fits-all solution.  When choosing how to finance your purchases, IT or otherwise, consider all the options and decide on the choice that best suits your company’s size, scope and budget.