Put yourself to the test, and ask yourself this simple question: Are you 100% comfortable with what you understand about business computer leasing and PC financing. From laptop to desktop to notebook to tablet, let's ensure you have some of the basics under your belt... so to speak!
When you are purchasing, and then financing technology assets such as those that we have described thee are certain economics that come into play. Financing those economics can be the make and break between a good decision and a bad decision... and trust us we're not talking about your choice of hardware or software manufacturer.
Let's explain. The reality is that there are some special decisions you need to make when financing a tech asset. Naturally you want to receive the benefits of the technology, keep your firm competitive, etc, but at the same time smart financing and acquisition strategies wouldn’t be bad either, right?
So let’s dig in. One major difference we can cover off quite quickly is simply that software, as well as hardware can be financed. We're talking about application software though, not development software, which is a different kettle of fish and a more complex discussion for a later date. A significant amount of Canadian businesses don’t seem to realize that software can be financed.
Traditionally software you finance along with business computer leasing is done on a 2-5 year term - we would never recommend a longer term for tech assets - quite frankly with changing technologies 2 years makes sense.
One great trick we have picked up over the years ( can we call it a trick ? !) is to structure a combination hardware and software business computer leasing and PC financing transaction on a 3 year operating lease, with the software being priced on a capital lease to own basis within that same transaction .
Whether you are financing a business computer laptop or a huge server farm you essentially have two choices of lease types in Canada - Capital and operating. Operating leases, you should know, play a huge part in the tech industry in Canada. If you have owned any computing in your home you quickly have probably become and expert in operating lease financing and didn’t know it.
How is that, ask our clients. Simply that you quickly realize technology changes, and anticipating that a laptop, PC, notebook, etc will last you a number of years is an incorrect assumption. It still might work; it’s just that it will be slower and not being able to handle new apps, programs, features, etc!
That’s why we tell clients they can adopt the same tech financing strategies as the largest corporations in Canada - utilizing operating leases. Why? Simply because an operating lease, which is a ' lease to use ' gives you triple flexibility during the usage of your product. Why triple? Simply because you can upgrade, return, or purchase the asset at any time during the term of the lease! That's true flexibility.
Smart choices can also be made around all the soft costs associated with a business computer laptop and pc financing strategy. Why? Simply because items such as delivery, installation, warranty, etc can be financed. Remember simply that your deal is with the hardware of software maker re terms of use, etc, - Your tech leasing partner simply facilitates that with some complimentary financing to lower your cash outflows.
So whats our bottom line, simply that tech financing is a little different, requires some specialized info on best structures and optimal advantages that accrue to you the user. Just the choice of lease type alone can save you thousands of dollars on any one transaction.
Want some extra help. Speak to a trusted, credible and experienced Canadian business financing advisor on business computer leasing - from laptop to PC. Make those smart choices in technology finance.
Stan Prokop - founder of 7 Park Avenue Financial -
http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/laptop_business_computer_leasing_pc_financing.html
Showing posts with label laptop. Show all posts
Showing posts with label laptop. Show all posts
2/17/11
Benefit of IT Technology Financing From a Laptop To Your Server Farm !
The greatest obstacle you have in realizing IT technology financing benefits its balancing your largest obstacles to innovation - cost and obsolescence.
From one laptop to your server farm and cloud computing its a constant risk and challenge to balance the investments you make in technology and computer against your cash outflows and the need to constantly upgrade to stay completive .
Many traditional financing options are available to meet your tech finance needs, but where we think you really attain maximum benefits with lowest risk is in highly specialized areas such as off balance sheet financing and residual risk partnering and sharing.
Should you be financing your technology or buying it. The age old adage in equipment financing, whether it be technology IT financing or plant equipment leases is that if it appreciates, buy it, if it depreciates, lease it!
We can categorically assure you that the largest, smartest, most cash rich, and successful companies utilize the benefits of lease finance, whether it’s one laptop, a fleet of laptops, or a server farm upgrade. (A server farm is simply a group of computers in a data center that run your business data - for reasons of balance usage, scale and security).
The most sophisticated approach to technology IT financing in the past has been the use of off balance sheet leases - these still are a very cost effective way of running your tech finance programs. The challenge is working with the right partner that allows you fairly, and seamlessly, to invoke your three rights as a lessee under this lease. Those rights are the ability to purchase when you want, upgrade, or return. Extending also plays into those rights - for example - you enter into a 36 mo fmv lease with the option of returning, but you need to use the equipment 5 more months, perhaps for a special project, or to run a new system in parallel, etc .
Fortunately, or unfortunately, depending on what side of the fence you are on a lot of the pure tax and accounting treatment historically recognized by FMV type finance are going away with new internationally accepted accountant standards changes . However, let’s be clear on this - your ability to secure lower payments, plus invoke your 3 rights under the benefits of IT operating lease financing still favor you, the lessee.
Speak to a trusted, credible, and experienced Canadian business financing advisor in the area of IT financing - whether it’s your server farm, 1 laptop, or 2000 laptops your financial decisions make save or impact you by thousands of dollars.
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Stan Prokop is founder 7 Park Avenue Financial ; Originating financing for Canadian companies,specializing: working capital, cash flow, and asset based financing , the 6 year old firm has completed in excess of 45 Million $ of financing for companies . For info / free consultation on Canadian business financing / contact details see:
http://www.7parkavenuefinancial.com/technology_it_financing_benefit_laptop_server_farm.html
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