When it comes time to replace or upgrade your office equipment, an important decision must be made for your organization: should you lease or buy? For a great number businesses, leasing is the most popular choice when it comes to acquiring office technology. To learn why, let’s take a look at two of the most common types of leases, capital leases and operating leases. Understanding the ins and outs of these leasing options will help prepare you for when it comes to time to make the final decision.
With a capital lease, your organization experiences all of the benefits and downfalls of owning the equipment. Capital leases are typically used in instances where the lessee plans to buy the device at the end of the lease term for a specific amount. Both the interest and principal being paid for the lease go toward the cost of the equipment, and all assets and liabilities for the device are placed on the lessee’s balance sheet. This type of lease is the least common option used, most often when a business wants to purchase a device without paying for it up front.
An operating lease keeps equipment off of the lessee’s balance sheet. The lender owns the equipment and receives the benefits associated with depreciation. This is a good option if you plan to finance equipment for a short period of time, or if you plan to replace the equipment with upgraded technology at the end of the lease period. This is the more popular lease option among businesses.
Leasing brings benefits
The many benefits of leasing office technology make it very difficult to turn down. Here are just some of the benefits that come along with leasing devices:
– Leases are easy to qualify for, making them a great choice for small- to medium-sized businesses (SMBs) with limited capital
– Leases can often be secured without a sizable down payment or none at all
– Leasing allows you to move on and upgrade your equipment when you need to, preventing you from owning outdated technology
– Leases come with a low, predictable, monthly cost, one that typically comes with maintenance included as a part of the leasing agreement
Leasing is an extremely popular option among businesses today for these very reasons. It’s likely that one of these benefits will stand out to your organization. For more information on leasing office technology and help deciding whether it’s the right option for your company, contact Infomax Office Systems today.
Leasing business technology equipment is a viable option for businesses of all sizes. In many cases, it makes more sense for an organization to lease equipment rather than purchase it outright. We’ve put together a few Frequently Asked Questions that can help you better understand this practical and strategic option to determine whether it’s the right choice for your business.
What is a lease?
A lease is an agreement for the rental of equipment for a specific amount of time.
What’s the difference between a lease and a loan?
A lease attaches a formal contract to the use of a machine.
What’s the difference between leasing and renting?
With leasing, you’re agreeing to make payments (typically monthly) over the life of the agreement, instead of one payment for its entire duration. Typically, renting is short-term (days to weeks) while leasing is long-term (years).
When is leasing better than buying?
Leasing is ideal when you want to limit your initial cash output, since with leasing you make monthly payments over a pre-determined period of time. Leasing is also perfect for companies looking to stay on the cutting edge of technology.
What’s the average length of an office equipment lease?
Typically, an equipment lease for office equipment is 60 months.
Who owns the equipment?
Throughout and after the lease, your lessor (the company providing it) owns the equipment.
Who services and supplies the equipment?
Your lease provisions usually include bundled service, toner, part replacement, and maintenance kits. Talk with your lessor about their package options.
What happens to the equipment after the lease is up?
You may have the option to extend the lease agreement, buy the equipment, or return it to the company.
How much does it cost?
Monthly payments vary depending on the lease length and the type of machine (black and white laser printer, multifunction printer/scanner/copier, copier only, etc.).
What do I pay up front?
Like most leases, equipment leases usually start with payment of the first and last months at the time of lease signing.
So, is leasing business technology equipment right for you? Consider the equipment you need, your ideal payment strategy, and whether you want to manage maintenance or have it handled for you. Contact Infomax today to learn about our office equipment leasing options.
It’s time to replace that old printer, copier, or MFP. Fortunately, this likely means that your business’s needs have outgrown your current printing solution, and that means things are going well. Still, the thought of replacing equipment and the hassles associated with purchasing it can make the process far more complicated than it needs to be. For example, an alternative solution to purchasing new equipment is leasing.
If you’ve never considered leasing your printing products, here are just a few ways it could benefit your business.
- Improve cash flow. Everyone loves cash, so why not hold onto more of yours? Leasing equipment frees up cash flow, as it reduces the need for painful setup costs. Furthermore, very few lease financing options require a down payment. Companies will usually work with you closely to tailor your printing solutions for your specific needs.
- Easier financing. Unlike the traditional purchasing process, in which approval can take months, leasing companies typically only need six months to a year of credit history. This means you can start solving your printing needs right away, regardless if your company is newer than most.
- Up to date. When purchasing new printing equipment, it is only a matter of time before that machinery becomes obsolete, or at least out of date. Fortunately, with leasing companies, you can keep pace with technology, updating your equipment as you go.
- Planning for the future. Leasing your printing solutions means that you are set up for the future. When your business is booming, you can adjust accordingly. Conversely, when rough waters occur, you can rest assured knowing you are paying for what is required for your business, and you can adjust accordingly.
- Short terms. Typically, a leasing company will lease equipment for a two-year term. This way, as situations change, so too can your printing solutions.
To learn more about how leasing your printing solutions can be beneficial to your business, contact Infomax today.