The Benefits of Leasing your IT Equipment Many small businesses are concerned about managing cash flow; however, they still have a need for state of the art computer systems and other IT equipment to ensure that their clients are receiving the benefit of current technology. If the equipment is not up to date, customers may be lost to the competition that may have seen the light. A number of business owners are paying for their IT investments from capital dollars and this practice maybe an affordable solution for some. However, having the right payment alternative in place is important for those companies that may not have the finances in place to pay for what they need or whom would like to conserve their cash flow. This is why leasing computer equipment is a great solution for small business. Leasing your technology investments will allow the owner of a small business to play with the big boys without sacrificing cash flow. Here is an example of how a leasing solution provides the flexibility to invest in the computer solution you need. If you have a budget of $12,000 per year to invest in technology, however you require a $30,000 solution in to keep ahead of your competition. By spending only $900 a month on a lease payment, you can obtain the full equipment complement required and still remain within your annual IT budget. This keeps $19,200 in your cash reserves, saves $30,000 for your available lines of credit, and saves $1,200 of your IT budget for other areas of your business. Leasing allows you to preserve lines of credit and cash reserves for appreciable assets, marketing and training. Further, it enables you to pay for your investment as your business profits and grows. Leasing your computer equipment and other technology will also protect your business from equipment devaluation and obsolescence. At the end of your leasing term you do have the option to buyout. However, you can also trade-up and re-invest in some new equipment, keeping your business ahead of the technology curve. You may also be afforded some attractive tax benefits by leasing your equipment. Your whole monthly lease payment, including tax, is a 100% deductible business expense. Compare this to bank financing, where only the interest portion of the payment can be included in your business operating expenses. To pay cash, you can only depreciate 45% of half the equipment value in the first year, followed by half the remaining balances in the second and third year, allowing only 80% of the value to be depreciated from the balance sheet. There are plenty of great leasing companies in Canada that will be able to assist you with your leasing needs. My company encourages leasing for our clients to ensure they affordably have the IT systems in place that keep them one foot in front of their competition. If you have any questions or require more detail, I recommend you seek out a leasing expert in your area. IT Matters works very closely with National Leasing, headquartered in Winnipeg. National Leasing has local representatives all across the country ready to help you find a way to pay for what appreciates and lease what depreciates. |
