Why leasing is a great option in times of business uncertainty
Offering customers a new business model, where they can lease new technology and equipment instead of purchasing it, is helping IT resellers and technology suppliers increase their sales fourfold.
Is uncertainty about Brexit delaying your customers’ IT investment? A survey by the Confederation of British Industry (CBI) suggests that 42 per cent of UK firms believe Brexit has hurt their investment plans. While many businesses are still stalling on their capital spending plans, more cannier firms are using leasing to keep their IT assets up to date.
Charles Baker, managing director of Baker Leasing says, “As appealing as it is to pay outright for new assets, in the current climate it may not necessarily be the best use of working capital. Uncertainty in the market, whether it’s Brexit or market instability, means companies have to run an even tighter ship to remain profitable. Offering customers the option to lease equipment means they can hold fire on making any large asset finance decisions and use their money more effectively elsewhere.
“It also gives your customers the peace of mind that they have the latest equipment and technology to continue to compete on a global stage without taking on the risks of huge capital outlay.”
Just some of the companies taking advantage of leasing include Richard Murphy Architects in Edinburgh who urgently needed computer hardware and software when a new project came in. Leasing it through Baker Leasing meant they could finance the equipment within a few hours with easy to set up repayment instalments.
Another customer, IT experts Fifosys used a sale and leaseback facility to finance a full office refit including IT hardware, partitioning, air conditioning and furniture. By refinancing items they had previously purchased, they could inject the capital back into the business where it was needed.
“Offering leasing as an alternative to cash demonstrates that you are considering your customers’ business needs, especially when external forces such as Brexit can cause uncertainty in the market,” says Charles.
“By offering short term leases, you can help customers take on new assets as and when a new project demands it. While longer-term leases mean customers can plan their cash flow with low fixed repayment rates, knowing that they will always have the latest upgrades. It improves long-term client relationships while also helping your business grow in uncertain times too.”
Just some of the benefits of leasing, include:
- No capital outlay
- Low fixed repayment rates for 1-5 years.
- Tax deductible repayments, saving customers 19 per cent on corporation tax.
- Better cash flow projections.
- It’s easier to do than companies think.