As the cost of living continues to rise at an exponential rate, the impact is not only hitting family households but extending to businesses too.
Many homeowners are limiting their electricity usage and cutting out unnecessary bills to save money, however businesses must continue to invest in their future if they’re to stay competitive.
This means continuing to invest in new technologies that will allow them to compete in the digital age.
How can businesses afford to invest during a cost-of-living-crisis?
The economic climate we’re currently living in can make any investments seem impossible.
However, there’s a simple answer to financing business technology – leasing.
Traditionally, many businesses chose to buy technology equipment outright. This involves paying a large, upfront cost and requires a lot of capital expenditure (CapEx).
Rather than paying upfront for servers, software or desktop devices, leasing technology solutions and moving to an OpEx (operational expenditure) model of working allows businesses to spread the cost of that investment over the useful lifetime of the assets.
This is particularly beneficial for equipment such as laptops, PCs and servers that will inevitably need updating and renewing over time.
Which technology solutions can be leased?
Many business owners assume that only physical IT assets can be leased – this is simply not the case!
At DVAD, while we offer leasing agreements on IT hardware and infrastructure, we also offer finance agreements on many other IT services and software too, including:
What are the benefits of leasing technology equipment?
Bundling all your technology costs (hardware, software, support and services) into one low-cost fixed amount each month means you’ll never be hit with large, unexpected maintenance costs ever again.
Leasing technology equipment also means you’ll always benefit from the very latest equipment and solutions – redundant/obsolete technology solutions will never be an issue for you again. This will help to keep your business at the forefront of digital transformation.
Many businesses can also unlock significant tax savings by leasing their technology equipment and retain CapEx that can be better be deployed elsewhere during this difficult economic climate.
The 5 main benefits of leasing technology equipment explained:
- Capital Retention – Where it may have once been logical to pay for your technology assets upfront, in the modern, digital age this typically isn’t the case. Technological advances are made on a daily basis. Due to this, technology assets quickly depreciate and become obsolete. Locking capital away in depreciating assets just doesn’t make sound financial sense. Leasing technology assets frees up capital to be spent elsewhere and ensures your business will benefit from the latest technology innovations.
- Matched Return on Investment – Through leasing your business technology, you can match your monthly payments based on the return on investment you see from it. Unlike capital investments, which don’t guarantee optimum output, financing provides you with more control over what you pay based on the quality of your technology, and in turn promotes business growth.
- Fixed Costs – As is common with financing agreements, technology lease payments are usually low and fixed throughout the contract period. This ensures monthly payments are manageable, and any changes in the economic climate, such as rising interest rates, are no reason for concern.
- No Budget Constraints – With leasing, the lack of high upfront costs means financing your technology assets will allow you to make strategic business decisions based on your business needs instead of your budget.
- Tax Efficient – The cost of leasing technology assets is deductible as a business expense, so this can reduce your overall tax bill. Also, rather than paying VAT in full as you would with traditional CapEx, leasing allows VAT to be paid on each monthly payment, spreading your VAT bill into manageable amounts.
Getting started with the Digital Enterprise grant
Although leasing technology assets is a more affordable way to keep ahead in the business world, we do still realise that generating funding for this can be difficult.
If your business is in need of funding, business support programmes are a great place to look.
At DVAD, a good option for many of our local clients is the Digital Enterprise Business Support Programme. The programme aims to help SMEs based in the Leeds City Region to achieve business growth and digital transformation.
Digital Enterprise currently offer 2 business grants:
- Digital Growth Voucher – a grant worth between £2,000 to £12,500 to help eligible businesses invest in digital technology to achieve business growth and digital transformation.
- Connectivity+ Voucher – to help eligible businesses to upgrade their digital connection – worth between £1,000 to £3,000.
Information on the eligibility for these grants can be found here.
Apply for a grant here.
Our high-quality services and expert team make us the go-to choice for businesses who need advice and guidance on the latest IT and Telecoms solutions. With the help of the Digital Enterprise grant, you too can transform your technology solutions.
If you’d like to discuss leasing technology solutions, or would like more information on the Digital Enterprise grant, please call us on 0800 84 999 84, or email us at email@example.com.