All companies are different, whether it be workforce culture, technology needs, corporate strategies, financial philosophies – the list goes on and on. Although the differences may be more apparent, many times there are also similarities that exist. How many companies agree there’s inherent value in spending their capital on revenue generating items and utilizing financial sources for equipment purchases? The numbers may surprise you. According to ELFA, 72% of all companies use a financing source when acquiring equipment.
These are not scenarios of companies overspending or extending beyond the financial means of the business. These are cases where financially savvy businesses are taking full advantage of the resources available to them. Over the years, we’ve noticed three main benefits that drive our customers toward financing their technology.
1. Use capital & bank lines to generate revenue
Chances are, your cash reserves and bank lines are used to hire personnel, run marketing campaigns, or stock inventory. You know your investment in technology won’t pay off in the long term like those initiatives will, so use your capital to generate revenue instead. Allow your money to work for you.
2. Work with a predictable budget
Battles over annual budgets are painful. By choosing to finance equipment purchases, you allow yourself to plan for technology acquisitions, upgrades, and projects without capital budget disputes. Consistent payments yield predictability – you know what they are today and what they will be tomorrow.
3. Gain an advantage & eliminate technological obsolescence
When it comes to keeping a business running today, technology is paramount. It can be your most critical need, yet it can also serve as a competitive advantage. Leasing enables you to use today’s best technology and upgrade when the equipment has outlived its advantage. You no longer have to worry about staying current or dealing with the disposal costs of outdated equipment.
Whether it be a large corporation or small business, companies of all sizes benefit from using current equipment, not necessarily from owning it. This follows the foundational concept that was made famous by billionaire oil tycoon, J. Paul Getty when he advised, “If it appreciates, buy it. If it depreciates, lease it.”