Buying vs. Leasing: What’s the Best Way to Build Your IT Infrastructure?

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Buy vs Lease
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Executive Summary

  • In a digital-first world, having the right IT infrastructure for your business is essential, but you have plenty of options when it comes to sourcing your machines.
  • In this article, we’ll explore the two most common options for installing new IT into your business: buying or leasing.
  • Whether it’s laptops, desktops, or anything else, we’ll look at the benefits of each option to help you decide which is right for your business.

Introduction

How old are your company’s IT systems?

If your team’s computers are getting a bit long in the tooth, it might just be time to consider an upgrade.

As we all begin to work more in the digital space, having laptops or desktops which can easily handle video calls, screenshares, and more is essential. But how do you fund this new IT infrastructure?

In most cases, you have two choices: to buy or to lease. The big question: which is right for your business?

Let’s find out.

3 reasons to lease your IT hardware

Let’s begin by exploring the reasons why you might want to lease your hardware.

In this case, you’ll set up an arrangement whereby an IT support company (like yours truly) will furnish you with the hardware, and you’ll pay instalments to a finance company. At the end of the term, you’ll usually have a couple of options – including continuing the lease at a lower rate, buying the tech outright, or upgrading your machines with a new lease.

Here are 3 reasons leasing might be a good choice:

#1: Lower initial costs, easier on your cash flow

Perhaps the biggest benefit of leasing is the fact that you can break down the large cost of IT systems into smaller monthly payments.

As any business knows, cash in king, so being able to skip the large initial outlay of purchasing an entire fleet of workstations can be a big benefit. This can be particularly useful if you’re a start-up or simply when cash flow is a little tight.

#2: The opportunity to upgrade to new hardware at the end of the term

One of the first questions you’ll want to ask when taking out a lease is, simply, what happens when the lease ends?

In most cases, you’ll have the option to:

  • Return your existing equipment and take out a new agreement for the latest and greatest IT hardware
  • Continue the lease at a lower rate, sometimes known as a “peppercorn rental”
  • Purchase the computers outright for a price set by the finance company

The choice is yours, of course, but the upgrade option represents another big benefit of leasing – the chance to install the fastest, most up-to-date hardware every 3 to 5 years.

#3: Initial installation, setup, and configuration is often taken care of for you

Buying a new laptop or a single desktop is one thing, but installing an entire network of 20 workstations and a server? That’s quite another.

When you choose to lease your computer hardware, it’s common for installation, setup, and configuration to be included in the overall price of the lease. That means your IT support company – and that includes the expert team here at Get Support – will install everything for you as part of the lease.

Want to take things to the next level? Ask about one of our IT support agreements to ensure your systems are running optimally, safely, and securely.

3 reasons to buy your IT hardware

The concept of buying your IT hardware really requires no introduction, although it does require a bit more cash from the off. (But we’re getting ahead of ourselves).

Here are 3 reasons buying your new IT hardware might be the way to go:

#1: Owned IT hardware becomes an asset for your company

When you decide to buy your servers and workstations, they instantly become an owned asset of your company.

That means they can be included on your balance sheet and directly add value to your business. By contrast, leased hardware does not count as an owned asset and hence won’t be included on your balance sheet.

It’s worth noting that owning your computer hardware outright also has some tax implications which may work in your favour. Every business is different, so we recommend speaking to your accountant for their recommendations from a tax standpoint.

#2: You’re free to make incremental IT upgrades when necessary

When you’re leasing your IT hardware, there’s always a chance you’ll need to hand it back at the end of the term.

In short, this means that – unlike with machines you own outright – you’re not free to make make any changes to their components.

For example, a PC you bought over 5 years ago might be running slowly now, but you could give it a little more life by adding a Solid-State Drive (SSD) and a little more memory. Of course, this doesn’t compare to the whole new machine you’d get via leasing – but it’s still an option when you own the hardware. Another option you’ll always have is to sell the machines at will – something you simply can’t do with a lease.

#3: You won’t pay any interest, so your overall cost is lower

Leasing vs. buying is always a bit of a short term vs. long term argument.

While it’s often easier to make multiple smaller payments over a longer period, it’s usually cheaper overall to simply pay in one lump sum. When buying outright, this is exactly what you do.

Even better, buying your IT hardware in one lump sum means that you won’t pay any interest at all, making it a more attractive proposition if you have the capital to spare.

Should your business buy or lease?

Those are the facts – but what’s the bottom line here? Should you buy or should you lease?

The truth is that all businesses are different – and that makes it nigh-on impossible to state with certainty which option is best. What we can say is, if you run a business, you’re better placed than anyone else to decide what’s right for you.

Of course, as an IT support company, we’re always on-hand to offer expert advice based on your specific circumstances. Call the team today on 01865 59 4000 and we’ll give you some free advice in plain English.

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