For a Cheap Notebook Computer, Go Laptop Lease
For Short-Term Needs, Computer Lease is Cheaper than Purchase
Aug 27, 2009
Rather than tying up capital in buying notebook computers, or taking a loan to finance the purchase, the SOHO business might want to look at renting or leasing computer equipment. In the short term (a year or less), renting is attractive, but for longer-term needs, leasing may be the way to go.
"If it appreciates, buy it; if it depreciates, lease it." ~ Attributed to J. Paul Getty III , American financier.
Advantages of Laptop Leasing
"Leasing offers several advantages, especially for cash-strapped small businesses," says James Martin writing on about dot com [cite]. Among the advantages he lists are the following:
- Minimal upfront costs – "With a typical computer lease, you have little if any upfront cost…. That's a benefit for businesses that can't afford a big lump-sum expenditure" for outright purchase.
- Easier Disposal - "Some leases enable you to return your notebook to the lessor…at the lease end. In exchange, you may receive a fair-market-value credit." Other possibilities are a $1 or FMV buyout.
Librarian Sarah Washburn, in "Leasing Computers: Pros Today, Cons Tomorrow" posted 15 May 2008 on her techsoup blog, likes these two benefits of leasing
- Technology currency – Advances in notebook technology create a short obsolescence cycle; leasing allows an upgrade every few years, so the business always has "the latest, fastest computers".
- Budgeting - Leasing distributes the cost over the term of the lease. Predictable expenses make planning and cash flow management simpler.
Gary Barzel, founder and CEO of an online business loan service, notes in The Pros and Cons of Leasing Your Hardware and Office Equipment at smartbiz.com that "Many small business owners struggle to maintain enough capital to cover daily operations, let alone invest in growth opportunities." Among his reasons for recommending leasing:
- Preservation of capital – "Equipment leasing avoids the down payment that most lending institutions require [for] a loan. In addition, leasing companies often cover the cost of…installation and maintenance." This frees capital for operations and growth opportunities.
- Expense vs. debt – "The cost of leasing equipment is considered an expense. A loan, however, is…a debt. This will positively affect the net worth of a small business."
- Tax breaks - "If the company is not planning on purchasing the equipment at the end of the lease, then it can claim the lease payments for a tax deduction"
- Flexibility – As a business grows or changes, so does its equipment needs. " Instead of tying your business down to inadequate or inappropriate equipment, leasing brings with it the flexibility to choose the equipment your business needs right now."
Leasing is not for every business, and it has its disadvantages for some businesses, especially those in the home business category. But if the advantages above apply, definitely consider looking into a laptop lease.
Pros and Cons of Computer Rental
Disadvantages of Leasing a Laptop
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