The benefits of IT leasing

The benefits of IT leasing

The benefits of IT leasing

It seems strange that businesses often lease new cars, photocopiers of phone systems, but many haven't considered IT leasing. It's a popular move among businesses in America, and one that the Federation of Small Businesses says makes perfect sense.

It is a real benefit to a business if they can lease their IT equipment to a company who has its own team of engineers to maintain the equipment, and gives you the option to buy the equipment at the end of the lease.

When you lease equipment, you pay for it in regular instalments over an agreed time. These smaller payments leave you with more cash, but if you pay interest on instalments then you will be paying more in the long term. You won't own the asset outright, unless you are given the option to buy it at the end of the lease.

You will usually be responsible for maintaining and insuring the equipment. The lease should appear on your balance sheet as a capital item.

IT leasing offers plenty of benefits that buying equipment outright doesn't. It won't affect your cash flow in the way that expensive purchases will; you can spread the cost and you don't need to worry about depreciation of the equipment. Also, in some instances, you can deduct the full cost of lease rentals from taxable income; the leasing company carries the risk if the equipment breaks down and it's much easier to upgrade rather than buy new equipment all over again.

If those aren't reasons enough, how about the fact that The Financial Times is a fan of IT leasing? The majority of FTSE 100 companies also lease their equipment - the popularity is starting to grow in England too.

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