A November article in Crain’s Detroit discussed “How 3 firms said ‘bye’ to old tech, overhauled IT and rebooted their bottom lines” – by upgrading their current systems to better serve employees and their customers.
The article focused on how most small and medium-sized businesses need to invest in their IT infrastructure with significant technology upgrades to increase their systems’ performance and also provide cost savings to their companies.
With the fast-pace of technology, businesses may find themselves spending more money to repair older, less reliable IT hardware, software and servers instead of resolving issues with updated computer systems. The short-term fixes develop into the old adage of placing a finger to stop a leak in a dam.
Many forward-thinking businesses have turned to fixed monthly payments through an equipment lease as a tech-friendly solution to upgrade equipment now without the large, upfront cost. By leasing IT equipment, small and medium-sized businesses can budget the equipment, software and installation costs into one fixed monthly payment (or one invoice) during a selected term.
Equipment leasing provides flexibility. Your business chooses the equipment (even from different manufacturers), the length of the lease term (3 to 5 years), and the end of term buyout (Fair Market Value or $1 Buyout). The payment does not fluctuate during the term – it is locked in throughout the lease – plus many SMBs prefer to match the monthly lease payments with their firm’s revenue stream versus cutting a big check upfront.
When should you choose a FMV buyout vs. a $1 Buyout?
• Fair Market Value Buyout has a lower monthly payment than a $1 Buyout as this option gives the customer the option to return the equipment at lease end, upgrade to new equipment during the lease period, or purchase the equipment for the FMV at end of term. The FMV buyout is geared toward technology equipment with a short lifecycle such as IT hardware or software.
• $1 Buyout is focused on companies looking to acquire the equipment at lease end due to the longer lifecycle (5 to 20 years) such as office furniture and machine tooling. The customer pays more toward the residual value of the equipment with the goal to own at lease end.
Crestmark Equipment Finance has helped many local and nationwide businesses maintain updated technology through flexible hardware and software financing programs geared toward avoiding equipment obsolescence. When the lease matures, Crestmark Equipment Finance can remove the older equipment and upgrade to new equipment and software without a reduction in functionality due to outdated systems.
As a leasing customer, you also may add new equipment, software, installation or other services throughout the lease term by adding to your Crestmark Equipment Finance lease. We also feature a full range of asset management and certified disposal services for IT equipment. For more information about our IT equipment lease financing programs, please contact Crestmark Equipment Finance or call 888.999.8050.