Technology funding: Leasing

What is Leasing?

Leasing allows you to use the equipment you need without having to buy it outright.

Leasing provides many of the benefits of owning technology equipment but can give you more flexibility at the end of your agreement. Even if your business has sufficient capital, it can be more beneficial to spread the cost of your technology equipment over an agreed period of time.

Whilst we would own the equipment, you will get full use of it and will be responsible for maintaining and insuring the equipment. We can also invest a residual value in the technology which can reduce lease payments below the asset’s cash price.

Examples of Leasing different technology

Many businesses traditionally purchase technology outright and are unaware of the benefits of residual value leasing specifically when the lease is matched to the anticipated ‘useful life’ of the equipment. Please note the following examples are for illustrative purposes only.

Laptop workstation example

Cash price: £1,340.83 (exc VAT)

Finance term: 36 months* (payments quarterly in advance)

Monthly rental: £35.02 (exc VAT)

Total cost: £1,278.72 (exc VAT)

Benefits:

  • Saving over cash price: £62.11 / 4.6%
  • Potential off-balance sheet financing
  • Asset reprocessing at end of agreement included in plan

Example based upon HP EliteBook 820 G4 with i7-7500U CPU. Subject to status. *Other terms are available.

Server example

Cash price: £6,564.38 (exc VAT)

Finance term: 36 months* (payments quarterly in advance)

Quarterly rental: £495.50 (exc VAT)

Total cost: £5,946.00 (exc VAT)

Benefits:

  • Saving over cash price: £618.38 / 9.42%
  • Potential off-balance sheet financing
  • Option to extend contract as follows:
    • 12month extension £524.22 (plus VAT) per quarter
  • Asset reprocessing at end of agreement included in plan

Example based upon HP DL380, Gen 9, Dual E5-2640v3 processor server 8SFF, 16 x 16GB, 4 x 146GB 6G SAS 15K. Subject to status. *Other terms are available.

Data storage example

Cash price: £6,997.08 (exc VAT)

Finance term: 36 months* (payments quarterly in advance)

Quarterly rental: £548.65 (exc VAT)

Total cost: £6,583.80 (exc VAT)

Benefits:

  • Saving over cash price: £413.28 / 5.91%
  • Potential off-balance sheet financing
  • Option to extend contract as follows:
    • 24month extension £239.60 (plus VAT) per quarter
  • Asset reprocessing at end of agreement included in plan

Example based upon Hewlett-Packard MSA 2040 ES SAS DC SFF Storage, 2 x 400GB 12G SAS ME 2.5in EM SSD, 22 x 900GB 12GB SAS 10K 2.5in ENT HDD, HP Ext 2.0m MiniSAS to MiniSAS HD. Subject to status. *Other terms are available.

Data switch example

Cash price: £4,010.85 (exc VAT)

Finance term: 36 months* (payments quarterly in advance)

Quarterly rental: £291.00 (exc VAT)

Total cost: £3,492.00 (exc VAT)

Benefits:

  • Saving over cash price: £518.85 / 12.94%
  • Potential off-balance sheet financing
  • Option to extend contract as follows:
    • 24month extension £195.22 (plus VAT) per quarter
  • Asset reprocessing at end of agreement included in plan

Example based upon Cisco 3650 48 port switch. Subject to status. *Other terms are available.

Buying vs Leasing

Leasing can also work out to be cheaper compared to a cash purchase:

6 year life-cycle deployment

Cash Purchase

6 year life-cycle deployment
Cost: £4,100
  • Typical business (desktop or laptop) deployment, purchased for cash and sweated over 6 years
  • As equipment ages, maintenance costs increase significantly and upgrades are required to keep the equipment operational
  • At the end of the asset's life the business is responsible for the environmental disposal
Two 3 year life-cycle deployment

Leased Technology Solution

Two 3 year life cycle deployment
Cost: £3,491 (saving of 15%)
  • Typical business (desktop or laptop) deployment, leased over 3 years and replaced/refreshed after 3 years
  • Maintenance costs are reduced due to equipment not aging past ‘technological life-span’ and therefore in-life upgrades are also minimised
  • At the end of the asset's life the environmental disposal becomes the responsibility of Close Brothers Technology Services

Benefits of Leasing:

  • Boosts your cash-flow through reduced rentals
  • Preserve capital through rental payments over the term
  • Enjoy full use of the equipment without the burden and responsibilities of ownership
  • We can dispose of your assets safely and securely
  • Fixed lease payments can provide you with certainty with regards to budgeting
  • Potential to bundle associated and integral software costs into one agreement

When the agreement ends you can choose to:

  • Return the equipment to us
  • Sell the equipment and keep a portion of the income from the sale
  • Continue to hire the equipment at a nominal rate
  • Re-hire for a further agreed term at a revised rental (if we have invested a residual value)
  • Extend the hire on a period by period basis on the existing terms (if we have invested a residual value)

To find out how we can help, contact us today: 0800 090 2291