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Computer Leasing – Business Computer Leasing In Canada

Guest post by: Stan Prokop

Article Overview: Information on the benefits of computer leasing in Canada including software financing and technology financing strategies for Canadian companies .

Computer Leasing – Business Computer Leasing In Canada

Computer Leasing - the lease financing of business computers and technology is probably the best example of your Canadian business utilizing classic benefits of lease financing. Why are Billions of dollars of computers and related technology leased every year - The answer is that the computer industry seems always in the forefront of new and leading edge technologies. As consumers we know in our home purchases how quickly we might be feeling that our technology for home computing is out of date, not fast enough, doesn't have enough bells and whistles, etc .

The classic benefits of lease financing are generally known to most Canadian business owners and financial managers - they include the ability to upgrade equipment easily or at the end of a lease term. Many organizations, especially moreso if they are larger are not looking to spend large sums of their capital budgets all at one time on computer upgrades. We refer to ' computers ' - but to be clear computer related financing includes everything you might be thinking of in a technology acquisition - that includes the actual personal computers, servers, mainframes if that is appropriate, application and operating software, as well as maintenance contracts and service contracts . The total dollars spent on computing power in any organization is always significant relative to the total of any company's capital budget.

Additional benefits include the ability to contain debt on your balance sheet, remove debt entirely and still acquire your computing power ( operating leases do that ) and also you have the ability to influence cash flow via fixed or variable payments . Many customers choose to pay leases on a quarterly or sometimes even on an annual basis, although monthly tends to be the most popular method.

We have spoken of obsolescence, and also referenced the fact that computer and technology leasing is a classic 'poster boy 'for lease financing. That is because as technologies change you do not want to be locked into the inability to acquire more computing power for the same or less money. The author worked in computer financing for over 20 years, and whether it was dealing with the CFO of some of Canada's largest organizations, to small start ups during the' dot com' era - all of these people recognized the power of technology financing .

Let's illustrate via a simple but clear example -. You need to purchase 100,000.00 of computers and related accessories - Typically your monthly payment would be, over a 36 month term approximately 3100.00/ month. If you had paid cash for the purchase you would probably find in two years you needed new computers - you have spend 100,000 in cash, you own old technology which is depreciating, and newer computers and software are being used by all your competitors to gain a competitive advantage .

What might you have done? What would an alternative business financing strategy be? Well , if you had leased the computers and structured the transaction as an operating lease here what you would do - you would return the computers to the lessor , order the new computers , and you payment would stay the same or in some cases be less ! And of course now you have regained competitive advantage in your marketplace if you place an emphasis on computer power, internal infrastructure, and access to your data, ET c

That is just one of many, many ways in which computer lease financing is a powerful financing strategy. Talk to an experienced business financing advisor who has credibility and experience in this type of financing - You will soon find your firm is also 'leading edge 'in financing!

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Article Tags: business computer leasing in Canada, computer leasing, equipment leasing



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