Every business needs some type of technology equipment to operate. And frequently companies choose to lease or finance that equipment rather than purchase it outright.
There’s a good reason for that. Technology becomes obsolete pretty quickly these days, and the rate of depreciation escalates over time. So, if your customers choose to purchase equipment in cash or even with a traditional bank loan or line of credit, the technology they’ll own free and clear will be outdated very quickly. And, as a result of the investment they’ve made in the equipment, they may have limited cash flow for other investments that might yield more positive returns.
What industries or business sizes choose to lease or finance equipment?
Companies of all sizes in all industries—SMB to enterprise—lease and finance technology equipment. Sure, there are companies across the board that may be hesitant to deviate from their tried-and-true “pay with cash” mentality. But they’re part of a dwindling breed.
In fact, as the speed of technology advancements has increased, so has the percentage of companies that finance their technology acquisitions. The lesson? Don’t assume your customers’ financing preferences based on who they are and how much money they have in their bank accounts. Most companies are getting ready to jump on the lease and finance bandwagon right now if they’re not already there.
The benefits of financing technology equipment:
It makes sense for everyone involved
- Ensure technology is current. Companies that opt to finance are prepared to pay a monthly fee and already conditioned to budgeting for a monthly expense to cover their technology solutions including managed services, unified communications and the equipment itself. Many of these same companies enter into these types of agreements with the intention of upgrading at the end of the term. Since they’re already budgeting for the monthly expense, the new payments that replace the old are easy to include in their budget.
- Accelerate ROI. It’s more rewarding to acquire new technology without taking a massive hit to the budget all at once—and realize an immediate increase in efficiency and return on investment.
- Pay one IT bill per month. Accountants and CFOs appreciate the simplicity of only needing to include one line item in their budget to cover technology equipment, installation and services with a consistent monthly payment. It saves them time and the company money.
- Preserve cash on hand. By not tying up their company’s cash reserves into a large equipment purchase, companies can direct those funds to invest in marketing, R&D or other possible strategic initiatives.
Not only is financing important to your customers, it’s critical for the future of managed service providers (MSP), unified communications providers and system integrators. We dig deeper into this topic in Can Financing Help You Grow Your Managed Service Portfolio?
While paying cash will always be an option, hardware as a service is here to stay—and the way of the future. So your next step, if you haven’t already taken it, is to decide which HaaS model will work best for your company and select a financial partner like Ingram Micro Flexible Payment Solutions
to help you serve your customers.
To learn more, visit https://imaginenext.ingrammicro.com/it-solution-provider/services/financial-solutions