As of October 2022, the UK’s leasing industry was worth an estimated £12.7 billion, largely being driven by the demand for expensive office and tech equipment.
The market took a hit as the demand for office tech fell in the wake of the coronavirus pandemic. But, companies are once again leasing larger items when compared with December 2020.
But what are the precise advantages of leasing technology as an office or business owner? Here are some of the key benefits to keep in mind.
1. Continually update and upgrade your equipment
Both businesses and households are increasingly reliant on technology in the digital age, while the speed with which hardware and software become obsolete is also quickening with every passing year.
This creates a conundrum for businesses, who need to maintain access to the best and latest technology in many instances (especially when looking to optimise productivity) but may struggle to fund regular upgrades or new equipment purchases.
Without the capital to make significant and recurring investments in tech, liaising with a technology leasing company becomes the most obvious and affordable alternative. Even if you have the requisite capital to make such an investment, you don’t necessarily want to spend huge amounts of money only for equipment to quickly become either outdated or completely obsolete.
In short, you can lease up-to-date and high-quality equipment for a finite and relatively short period of time, before negotiating a viable upgrade at the end of your existing agreement.
What’s more, you can achieve this objective without incurring a financial loss or negatively impacting productivity, which represents a win-win for any business.
Leasing equipment also enables you to test and trial new equipment, making it easier to achieve further productivity gains over time.
2. Grow your business using technology
On a fundamental level, reducing capital investment levels into your business creates greater resources with which to grow your business. This capital can subsequently be invested into other areas of the business, including strategically important disciplines such as marketing and sales.
Depending on the nature of your business and the industry in which it operates, the technology you lease will play a vital role in its growth and success.
Universally speaking, leasing can enable you to secure more powerful computers and efficient servers, which can make a difference to the individual productivity of each staff member. The combination of these incremental gains throughout your business can potentially lead to much higher output, increased revenue and higher profits over time.
Above all, leasing also offers you possible access to expensive pieces of equipment that may otherwise have been unaffordable. This can help you to potentially compete with more established or well-resourced rivals, and scale at the fastest pace possible within your marketplace.
3. Manage your recurring costs and cash flow
When you enter into an agreement with an equipment and technology leasing company such as Grenke, you’ll usually be required to pay a single monthly repayment that covers all agreed and associated expenses.
This monthly fee is usually fixed too, so you won’t have to constantly recalculate payments or juggle your finances, especially in the already strained economic climate that we are currently experiencing.
This should make the management of your business’ cash flow and overall finances more straightforward. At the same time, the terms of your agreement may potentially make reference to maintenance cover and in this case, the agreement may cover some or all scheduled maintenance costs. This should reduce your spending further over the duration of the lease.
Remember, when you buy expensive tech and other equipment for your business, the upfront cost may also be compounded by scheduled and unscheduled maintenance payments. This can lead to instances where your equipment breaks down and it’s difficult to find the budget to fund a repair, possibly leaving you without a key piece of technology for an indefinite period of time.
4. Makes the process of budgeting considerably easier
In addition to making real-time money management much easier, the ability to reduce and simplify your monthly outgoings can help you to create more accurate budget forecasts in the future.
This is because you should have a more concrete understanding of your ongoing monthly costs, with a lease agreement incurring a single cost over a specified period of time.
So, you can create short and medium-term budgets that are more insightful, making it easier to plan future investments and the growth of your business.
5. Negate the need for any upfront cost
Remember, companies leasing technology can also benefit from a tailored financial plan when they enter into an agreement with a service provider.
This should negate the need for you to pay the full price upfront, as you can spread the cost by making monthly payments and retaining as much as your financial capital as possible when setting up or expanding your business venture.
We’ve already touched on the benefits of this in terms of accessing the best possible tech and investing securely in your venture, but it also has a positive impact on real-time cash flow and frees up working capital to build revenue and ultimately create a generative model.
Some 80% of business failures are linked to cash flow issues and this challenge is even more pronounced in the current economic climate. So, consider leasing as a way of sustaining and consolidating business growth without having to spend above your means or put your venture at risk!