To Lease IT Equipment or Not - Benefits to Your Business

The rapid growth in IT implies that the latest computer equipment today becomes antiquated at an extremely fast rate. Factor in the high depreciation rate of computer equipment and it becomes clear how businesses, especially startups that are yet to become established may have a hard time keeping up with these changes. Considering for example that a $6,500 computer depreciates at about 14.3 percent, you may find yourself stuck with computer equipment that is not worth much as assets in a few years. Whether you choose to purchase new IT equipment or to lease, your decision should be influenced by the needs of your business.
Choosing to lease IT equipment offers you several benefits especially if your expenditure does not allow you to spend on new equipment, which could be costly because of the required down payments. When you lease, you have an agreement with the leasing company on the term of the lease along with the conditions and terms that will be applicable to the lease while it lasts. You can also negotiate the fees and terms of payment to an arrangement that will suit you best. Here are some other benefits to your business when you lease IT equipment:
Maintenance
When you buy computer hardware, you should have a budget for regular maintenance to keep the equipment up to date and in good working condition. This may not cost you much if you are using a few pieces of equipment. However if your business grows and you add more equipment, it becomes necessary for you to hire maintenance staff or contractors. Some leasing companies will offer computer maintenance and support to businesses as part of the lease. Consider negotiating for maintenance services in your lease and avoid the additional cost and hassle of looking for a separate service provider.
Upgrades
Tech companies normally upgrade their products every three years. Even though the older versions may still work properly, upgraded products offer you more efficient features and function. If you wish to have the latest equipment, buying new one every few years can be quite expensive. This can make it difficult for you to compete effectively with businesses that operate on high end technologies and equipment. One of the advantages of leasing is that if the type of equipment becomes obsolete after a few years, you can easily replace it with the most up to date when renewing the lease after the current one expires.
Tax Benefits
When you lease IT equipment, the payments you make are considered a business expense on your tax return and this can significantly reduce the net cost of the lease. Additionally, leases allow flexibility and easier repayment terms over loans. With a lease, you can have smaller repayment installments over a longer period.
Security
This can be an issue especially if you have sensitive information stored in the equipment you have leased. Once the lease expires and you need to return the equipment, the lease company can offer data management services that include transferring the data safely to your possession and erasing it from their equipment.