With today’s high levels of technology obsolescence, organizations need to consider a number of key financial factors when deciding whether to rent or purchase equipment.
What will your equipment be worth at the end of its useful life?
The operational value of your equipment decreases over time, while the residual risk of using outdated equipment increases. Implementing a rental solution will optimize residual value and minimizes residual risk.
What is the true cost of the capital or other funds that are required to finance both the acquisition and operation of your equipment?
Implementing a rental finance strategy will allow you to leverage your capital and invest it in opportunities that will help you to grow your business. This will mean your capital would no longer be tied-up in depreciating assets.
Will your asset withstand the rigors of your next external audit?
Your organization could risk qualification if auditors are not satisfied with the results of an asset audit. Leasing your assets alleviates this concern. By leasing your equipment, you not only remove your assets from the balance sheet, but you also gain greater control over the true cost of your leased assets
Most companies state that they prefer leasing technology because it offers:
- Protection against Product or Software Obsolescence Leasing offers the option of keeping servers, work stations and software licenses current with the latest versions.
- Improved Cash Flow Leasing permits a close matching of rental payments to revenue produced by using the technology equipment. Leasing keeps cash reserves accessible.
- Tax Benefits Tax advantages can make leasing more cost-effective than outright purchase or bank financing of the same equipment.Speak to your tax advisor for details.