One of the most popularly used methods of acquiring office equipment is through leasing. The process of office equipment leasing is easy and you can acquire the right equipment that you need.
Leasing companies offer lower rental payments for equipment because they assume that the leased equipment will have residual value at the end of the lease term. This is a very good opportunity for many business owners because it helps them to save cash. Not only that, but you do not need large amounts of money to be approved for a lease. Unlike when you take out a loan, you do not need to make any down payments or provide collateral to be approved for a lease. Even if your lessor requires you to make a down payment, it is much lesser than what you would pay when taking out a loan. With that in mind, how exactly do you go about office equipment leasing?
How To Go About Office Equipment Leasing
When most people think about office equipment leasing, they think of leasing IT equipment. The leasing industry allows lessees to lease almost anything so you do not have to limit yourself to leasing IT equipment only. Many equipment leasing companies also lease furniture.
Leasing furniture and leasing IT equipment requires two different approaches. Leasing IT equipment requires you to look at several factors some of which do not apply to leasing office furniture. For instance, IT equipment declines in value rapidly.
Every so often, new software will be created by IT gurus to help computers become more efficient in the tasks they are used for. Some of the software produced requires advanced hardware and drives which means the computers that you lease will almost certainly become obsolete at the end of the lease term.
IT equipment is the most leased equipment probably because it is subject to continual and rapid advances in technology. A good way to approach technology equipment leasing is to ask yourself if you would like to own the IT equipment after three years. If the answer is no, then you should go for a lease that allows you to return the equipment at the end of the lease term. You should never sign a lease that is longer than two years unless you want to be stuck using outdated IT equipment.
The best strategy for leasing IT equipment is to enter a lease that allows you to return the equipment at the end of the lease term, has a well defined fair market value and allows you to upgrade to newer equipment.
When leasing furniture, obsolescence is not a very big deal. In fact, there would be no need to replace the furniture as often as you would IT equipment, so a lease with a longer lease period would suffice.
Most business owners prefer to keep the furniture even after the lease period is over without paying for lease extensions. The best way to lease office furniture is to sign a lease contract that has a bargain buyout such as a $1 buyout lease. Such a lease has higher monthly rates but your monthly payments count as part of a down payment towards the furniture.
You can also choose to go with an operating lease if you are not sure you want to purchase the equipment at the end of the lease period. The monthly lease payments in an operating lease will be lower than the ones in a $1 buyout lease. This type of a lease will give you the option of purchasing the equipment, returning it or renewing your lease at the end of the lease term.
Summary
From the above information, the best strategy for office equipment leasing will depend on:
- The type of equipment
- How long you plan on using the equipment
- If you plan to own the equipment even after the lease period is over
- Monthly rate
If you have a true picture of the costs involved in leasing office equipment, you can negotiate a much better deal and lower the cost of the lease over the lease lifecycle. Ensure that you are knowledgeable in the language used in different equipment leasing agreements. Engaging a negotiator who knows how to deal with equipment leasing companies can be very beneficial in the long run.
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