Why Companies Should Consider Leasing Computers and Technology

Many companies are not aware of the significant benefits related to acquisition financing in computers and technology segments. The proper term for this type of financing is ‘ Technology lifecycle management ‘. Most business owners simply consider the following question: ‘Should I buy or lease my firms new computers and software and related products and services?’

Two old adages related to leasing still ring true when it comes to the technological aspect. That is that one should finance something and depreciates, and one should buy something that appreciates in value. Most business owners, and consumers as well know very well that computers depreciate in value. Systems we paid thousands of dollars for years ago are now hundreds of dollars. Walk into any ‘ big box ‘ retailer and see the dramatic moves in technology.

Business owners who finance technology demonstrate a higher level of cost effectiveness. The company wants to reap the benefits of the technology over the useful life of the asset, and, importantly, more evenly match the cash outflows with the benefits. Leasing and financing your technology allows you to stay ahead of the technology curve; that is to say you are always using the latest technology as it relates to your firms needs.

Businesses that lease and finance their technology needs are often working better within their capital budgets. Simply speaking they can buy more and buy smarter. Many companies that are larger in size have balance sheet issues and ROA (return on assets) issues that are compelling. They must stay within bank credit covenants and are measure often on their ability to generate income on the total level of assets being deployed in the company.

Lease financing allows those firms to address both of those issues. Companies can choose to employ an ‘ operating lease ‘ structure for their technology financing. This is more prevalent in larger firms, but works almost equally as well in small organizations. Operating leases are ‘ off balance sheet ‘. The firm adopts the stance of using technology, not owning technology. The lessor/lender owns the equipment, and has a stake in the residual value of the technology. The main benefit for the company is that the debt associated with the technology acquisition is not directly held on the balance sheet. This optimizes debt levels and profitability ratios.

At the end of those operating leases, which are usually 36 months long, the customer has the option of:

1. Returning the equipment
2. Buying the equipment ( not likely though )
3. Negotiating an extension of the financing for continued use of the computers, technology, etc.

Companies that have recently acquired computers and technology can in fact negotiate a’ sale leaseback ‘ on those same assets. This financing strategy brings cash back into the company, as the firm has employed a leasing and financing strategy building on our above noted them – using technology, not owning technology.

In summary, the key benefits of computer and technology lease financing are:

* The company can stay ahead of the technology curve
* Computer leasing and financing has significant balance sheet and income statement benefits
* The firm has flexibility with respect to buying new product, returning existing technology, and generating cash flow for purchases already made

Many of the benefits we have discussed relate to leasing in general. However, technology and lease financing are very perfectly suited to the business financing strategy of leasing.

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Computers and Technology – Internet Tools and Software

Nowadays, there is much that a PC owner is able to do to maintain the performance or or even effect a simple repair with suitable Internet tools and software. Most complaints about the performance of a PC centre around the slowing down of the machine. In my experience fragmentation of the “C” or “D” hard drive or both is often a major cause. This is because with continual deletion and overwriting of new files, the data ends up all over the drive in small segments. The PC operating system, i.e., XP or VISTA provides a built in defrag program to reduce the file fragmentation. Usually, the invoking of the defrag program will make your PC fast again.

Other Internet Tools and Software are available to fix problems involving the Internet when your machine becomes saddled with Spyware and Adware. These unwelcome programs enable outside individuals and companies to spy on your web browsing activities and invade your privacy. ‘Scan your Computer for Free’ programs are available to effectively eliminate these nasties. Also, most people are aware of virus infections in one’s PC and there are good AntiVirus programs, which will keep your PC safe.

Another problem which will challenge your PC is missing and invalid references in your Windows registry. Again, there are good programs to clean any invalid or obsolete entries.

To summarise in this modern day of Computers and Technology, there are many Internet Tools and Software available for you to keep your PC running efficiently. These tools are easy to install and apply and are relatively inexpensive to buy representing good insurance for your PC investment.

This article authored and submitted by: Ralph McIlwraith
Ralph has had many years experience with Computers and Technology, Internet Tools and Software
having built and serviced several machines from the introduction of the earliest primitive PC to the present.

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