Learn About the Benefits of Leasing Your School’s Technology.
Leasing school technology and leasing products in general, is a conversation that we have every day, so let’s have a look at the benefits of leasing office equipment.
We are often asked: how much does it cost to buy X shredder, Y printer, Z projector. Our response: why do you want to buy it? Would you not consider leasing the machine or device? Purchasing assets and equipment is a business necessity and can be a very expensive venture; leasing offers many advantages to your school.
Very often consumers and those in the purchasing role aren’t aware of the pros and cons of buying versus leasing school tehcnology and office equipment finance. So let’s take some time to delve deep to see what is what.
The Wikipedia definition of leasing is as follows: ‘A lease is a contractual arrangement calling for the lessee (user) to pay the lessor (owner) for use of an asset. Property, buildings and vehicles are common assets that are leased. Industrial or business equipment is also leased.’
The Benefits of Leasing Your School’s Technology
1. Maintain Your Cashflow
In any business (your school is essentially a business!), cashflow rules; it’s king! Purchasing equipment, be it a shredder, printer, multi-functional device, projector, an interactive whiteboard can be costly, but what if there is a way to not tie up your capital and to manage your cashflow? Well, this is where leasing comes into the equation. Your working capital is not utilised and used up, so it’s there for bigger ticket items that do need a cash outlay or for a rainy day for any unforeseen item. You do not have to find a lump sum of cash at the outset. You also avoid paying the VAT on the asset upfront, as this is paid to the lessor.
2. Manage Your Budget and Spread the Payments
Your monthly payments are fixed which allows you to budget effectively. Your purchase is spread over a number of years, typically 3 or 5 years in the office technology/equipment arena, and therefore your cash reserve and cash flow are intact. No large capital outlay is required. For many schools today, having a leasing payment to make is akin to making a payment for electricity or your phone bill. Payments are generally made on a monthly or quarterly basis.
3. Use of Equipment
From the moment you sign the paperwork, you have use of the equipment. This use is for the full duration of the contract. Think about it – you make a small repayment and get all the benefits of the equipment in your office, business or school.
4. The VAT Implications
The lessor has paid the cost of the asset and the associated VAT. The lessee pays VAT on the lease rentals that are payable. The lessee can reclaim VAT on the rentals, once they are VAT registered. Lease costs are an allowable expense against corporation tax.
5. Helping Your Business Grow
If you don’t have a full capital outlay to buy new devices and office equipment, your cash is free to spend on other school projects.
6. The Speed of Technological Advances
For a lot of office equipment, e.g. shredders, balers, ProfiPack cardboard perforators, ActivPanels, projectors, interactive projectors, printers, scanners, there is a huge amount of technology involved. Epson alone spend €1.5million dollars a DAY on research, so that gives you an idea of how quickly things are changing. If you purchase machines and devices, you will have a depreciating asset on your hands, that will have no saleable value in a couple of years and when you do need to change it, you’ll have to pay for someone to take the equipment away. With a lease arrangement, you can get a regular upgrade of the equipment to ensure it’s always fit for purpose and that you are utilising the most up to date technology and solutions available.
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