Leasing vs. Buying Technology

As businesses become more dependent on technology to grow market share and maintain their leadership positions, the question of “leasing vs. buying” comes up fairly often. After all, if your success is tied to the technology you use, it’s reasonable to conclude that staying on top of the technology curve should be a central element of your business strategy.

However, for most small and mid-sized businesses, buying the latest technologies can be impossible, given the cash flow issues this would create for the business. So for any company trying to preserve cash, leasing becomes the best solution in this scenario.

We’re in the leasing business, so you’d expect us to point out the many benefits. We won’t disappoint.

First: Leasing helps you maintain or achieve technology leadership. PCs, servers, laptops, telecommunication, etc. – all this equipment eventually becomes obsolete. If you need to update equipment during the lease, you will be able to do it.  Once your lease expires, you will also be able to upgrade and lease whatever new technology is then available.

Second: You’ll have predictable, consistent monthly expenses. With a lease, you have a pre-determined monthly line item, which helps you budget more effectively.

Third: You’ll pay very little up front. This should make your CFO extremely happy. Because leases require minimal cash at the beginning, you can usually get the technology you need without depleting your company’s bank account or going back to investors.

Fourth: Your company will remain competitive. Leasing enables you to have hardware from different manufacturers, all kinds of software, services and support packages part of a bundled payment plan. It doesn’t get any easier to keep track of your IT expenses.

Conclusion: Leasing gives you flexibility upfront so you can get what you need without wiping out your cash and flexibility during the lease to upgrade or add more equipment as needed. Leasing also give you flexibility at the end of the process to move to a new IT solution.  It’s tough to put a value on innovation, predictable expenses, improved cash flow and financial flexibility.