Benefits of Leasing Vs. Buying Equipment—A Quick Guide

Benefits of Leasing Equipment Blog March Blog1

When it comes to IT today, the benefits of leasing equipment are clear. Leasing equipment not only makes lifecycle management more efficient, but it also takes it entirely out of your hands. Not only that, but there are some very real tax incentives for avoiding equipment ownership, not to mention the reduced cost in general. But what does IT equipment leasing look like in practice? Let’s break down the advantages and then explain how the process works.

Three Advantages of Leasing in Business

Efficiency, quality, and cost. Leasing the IT equipment for your business is simply an extension of all of the reasons you would hire professionals to handle your IT, your HVAC, your facility’s cleaning, and so on. Whether you are looking for the most up-to-date systems without having to do the research and installation yourself or are simply looking for stable, predictable billing, leasing is the best solution.

Improved Lifecycle Management

Just as a managed IT provider should be helping craft the overall technology strategy for your business, leasing allows your MSP to manage the entire hardware lifecycle as well.

Traditionally, C-level executives and internal IT personnel will develop short- and long-term goals for your IT equipment like when a server needs to be upgraded, when new workstations need to be rotated into the workforce, and so on. Leasing equipment doesn’t mean executives are left out of the decision making, it just means that those plans no longer need to be executed in a cumbersome way.

Leasing also demands a higher standard of equipment tracking throughout the organization. In order to ensure all equipment is returned to the lessor when the time comes, an IT asset management plan must be created. Luckily, if you are already working with a managed services provider, there is a good chance a plan is already in place. Essentially, this plan will allow you to swiftly make upgrades when the time comes. In other words, the transition no longer comes with a headache.

Sure, everyone knows that awesome feeling when you boot up a brand new computer. Everything is fast, the OS is clean, and the hardware itself is slick. However, we all also know how this feeling doesn’t last.

The easier upgrade process that leasing allows will eliminate the struggle at the end of the equipment lifecycle by injecting some predictability into the equation. When you know it’s time for an upgrade, the angst about old hardware will be dramatically lower.

Infrastructure Leasing

Leasing allows businesses to update their equipment on a regular and predictable basis. Getting the latest equipment is a major driver of productivity in the workplace and is one of the biggest incentives to lease equipment.

While bigger companies with extensive IT budgets can probably afford to purchase the latest and greatest equipment, leasing allows small businesses to compete. From VoIP phone systems to updated copiers, leasing covers every technology that you use every day, all without the unpredictable, major hits to your bottom line.

It’s also common for management to pass down their equipment as it ages. This top-down approach leaves the workers at the foundations of the company working with older, less efficient technology. Leasing helps foster a sense that everyone is being treated equally in the workplace.

Before equipment leasing was common, there were two main ways companies would upgrade their equipment. Everything from servers on down to workstations could either be upgraded piecemeal or replaced altogether. Replacing hard discs and RAM inside of each computer is incredibly time-consuming, and replacing an entire system is expensive. Leasing solves both of these problems.

IT Costs and Tax Advantages of Leasing Equipment

Cost predictability and cash flow are two driving forces that allow businesses to grow. It’s very difficult to predict when new systems will need to be upgraded, particularly when operating in a complex IT environment with servers and different workstation needs. Leasing essentially turns your “one-time” hardware purchases (that actually happen countless times throughout the year) into a predictable service model.

This creates a situation where the initial expense to upgrade and maintain systems is far lower and can be consistently and more reliably budgeted for. Lease payments can usually be deducted as a business expense, while the lack of ownership provides other benefits. Fewer assets mean lower taxes during a sale, for example.

Leasing presents a number of clear advantages over traditional purchasing and ownership. The Millennium Group makes the process simple.

The Millennium Group Equipment Leasing

The Millennium Group offers equipment leasing solutions that link up seamlessly with our other IT services. In other words, if you’re looking for a cohesive technology strategy for your business we’re the provider of choice.

Contact us today to see how our approach can help your business!