IT equipment is essential for the success of any business. It is inevitable that computers will depreciate over time. Many companies do factor in repair costs for their office equipment however rarely plan for the replacement and upgrade of their equipment. Leasing office equipment will allow companies to reap the benefits of extra cash to invest in other areas such as sales, marketing and accounting to grow your business exponentially.
What does leasing IT equipment entail?
Leasing allows your business to lease purchase the hardware and software you require from a vendor or supplier for a contracted period of time. It enables you to spread the cost over the length of the contract. At the end of which you have the choice of either returning the equipment to the lender, renew the lease with upgraded options or purchase the inventory. A leasing solution with the right terms, can allow your business to grow and stay competitive. Below we have outlined the benefits of taking out such a lease.
Some of the main benefits of leasing IT equipment are:
Up to date equipment
Leasing is a cost-effective way of keeping your equipment up to date. Outdated equipment can be extremely harmful for your company; the WannaCry ransomware attack that swept through dozens of hospitals throughout the country in 2017 cost the NHS upwards of £92 million according to a report from the Department of Health. Leasing your equipment means it will always be up to date, with the option of upgrading at the end of the lease term.
Staggeringly 80% of start-up businesses fail within 2 years; a major factor in this statistic is lack of cash for your business expenses. Predictable lease payments help with budgeting, thus allowing you to invest money into other areas of your business to increase growth. Better cash flow also gives the opportunity of a higher credit rating for your company, allowing you to honour your debts and pay on time. Without having to worry about your company’s cash, you can spend more time and energy positively driving the company’s development. If a business was to purchase equipment outright, the equipment then becomes a depreciating asset which shows on the balance sheet.
Some IT providers will also offer the benefit of on-going IT support giving you peace of mind that your business will always be operational. Many businesses rely profoundly on IT systems; it is almost imperative that you have some element of IT support in place to safeguard against system failures. If a business chooses to purchase equipment outright, they can be hit with heavy costs for repairs and replacements. Check that the leasing company you choose provides this support, it may be available as an optional extra.
Lease payments are eligible for a tax write-off as business owners can cite the full lease payments as a business expense, therefore they don’t appear as debt. This means that all payments can be deductible against corporation tax.
A lease purchase contract is 100% tax deductible. There is the opportunity for any profit-making business to make a substantial saving of between 20-40%, giving you the ability to use your cash reserves to increase profits. Banks prefer a business to use a lease purchase; due to the lease showing on the balance sheet rather than a liability. This is commonly referred to as ‘off balance sheet’ financing. All these benefits basically mean that the business owner can own the equipment at the end of the lease whilst also taking full advantage of all the benefits during the lease.
Is leasing IT equipment the right choice for your business?
Ultimately, leasing your equipment is perfect for smaller businesses looking to scale up yet also a great solution for a large, established company to expand their offices. Leasing equipment can often seem like a higher short-term expense, due to the fact you would usually pay more than the true value of the equipment over the 3-year lease. However long term, it can give your business the boost it needs to focus on growth and invest cash in more important areas.
Office in a Box Flexible Leasing IT Solution
Here at The ICC group we offer a flexible ‘Office in a Box’ leasing option; businesses can use our online calculator to get a quick quote on all the office equipment, software and support you need. Our Office in a Box solution has a 3-year leasing period that allows you to purchase or upgrade your equipment on to a new plan at the end of the term, guaranteeing your business stays up to date. We also provide IT support to ensure your business does not suffer from any unexpected downtime, with a dedicated help desk and an onsite response time of within 4 hours! The leased equipment includes delivery, installation and set-up to ensure you are up and running quickly and efficiently.
You can check it out here: Office in a Box Flexible IT Solutions