Leasing computers can maximize IT investment

Dell announced new leasing and financing options for U.S. businesses, including a fair market value lease rotation program that allows customers to pay for the use of technology and return or exchange it at the end of the lease term. Dell aims to cut the total cost of ownership in computer equipment by as much as 20.5 percent.

Many law firms do not have the budget to implement the right IT strategy to stay competitive in this economy. Even if you do purchase new technology, it has to last a period of time to get a good return on your investment: for new computers, that's about three years; for new infrastructure components like routers and switches, that's about 5-7 years. Even with those projections, technology can also become obsolete quickly, so purchasing it outright can hinder a firm’s ability to update its IT infrastructure in a cost-effective manner and stay on top of its game. So why not lease it?

By leasing computers and other equipment, firms can get the latest technology and save operating capital for more pressing needs aligned with their line-of-business: law. Leases have flexible terms and, at the end of the lease, you can renew it, start a new lease on new equipment, or even purchase the used equipment. Or, if you are not satified with the lessor and/or the equipment, find a new technology partner.

Endpoint. If you lease vehicles, take all the reasons why you do that and take a hard look at the computer equipment sitting on desks and in racks.

Comments

[Mary A. Redmond, President, Independent Lease Review, Inc.]

Leasing can cost you big time and can be a good business tool or create a nightmare.
Here are 8 tips to more successful leasing.

1. Negotiate all major terms especially those that carry financial implications.

2. We look at 26 areas in every lease for business and financial issues. Go deep in the contract review.

3. If you want to lease you must understand the financial impact of 15, 30 or 45 days of interim rent. Most law firms do not even know what interim rent is until the invoice arrives. Minimize interim rent. Use interest only.

4. If a company wants to purchase some of the equipment, how much will the in-place and in-use fair market value will be? Uh-Oh. Surprise! Negotiate it.

5. Want to send the equipment back at the end of the lease; many leases contain return and restocking penalties as high as 10%. Negotiate those before signing.

6. Put lease tracking and management processes in place. If you don’t, leases will automatically renew for up to 12 months.

7. Miss a payment date and face a penalty of 10% of the missed payment plus 18% annualized interest.

8. Move equipment to a new office and the leasing company re-documentation fee may be as high as $500 per asset plus $500 per location. The worst we have seen.

9. Want to know more, go to www.shop.leasespeak.com and request our free resources:

a. Top 10 Tips to Save Money on a Lease
b. 10 Questions to Ask Before Signing an Equipment Lease
c. How the RFP Process Saves You Time and Money

[rent computer equipment]

Renting is a better solution for several reasons. For temporary purposes such as trade shows, corporate events, or any short term effort requiring audio visual or computer assets, renting is lower cost versus capital procurement.