Advantages of Leasing or Renting
Eliminate the risk of technical obsolescence—you are investing in new software solution because your current systems no longer meet your business needs. You need better information, faster decisions and improved efficiencies in order to keep up with the increasingly competitive marketplace. Leasing/renting your new software solution allows you to keep up with the latest releases and changing technology. When future upgrades are released, many times you can implement these with little or no change in your monthly payment, never allowing your company to fall behind again in technology.
Added flexibility, improved cash flow and better use of your working capital—traditionally, banks are reluctant to finance 100% software. If they do, many times they want larger down payments and require the loan to be secured by other assets owned by your business. This does not allow you the flexibility to structure a plan that best meets your business needs. When leasing/renting, you can finance 100% of the cost of the software along with the implementation and services required to get the system operating. You will not have to pledge additional assets and you can select a term that best meets your budget without putting a strain on your cash flow.
Tax advantages—the payments you make for most lease/rental agreements can be treated as an operating expense, allowing you to write off these payments and not have to capitalize the asset. This not only provides you tax advantages but also improves your company’s financial statements.
Preserves your working capital– leasing/renting your software provides you the opportunity to preserve your working capital and to use it for other growth opportunities and income producing assets.