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Financial flexibility

01 Dec 09

ICT leasing can create new opportunities for resellers in the economic downturn.
Technology leasing has been around for years, but in today’s world, it’s becoming an increasingly attractive option. Why? Because it allows businesses to preserve cash flow, stay up to date with the latest technology, and offers a number of tax advantages.
ICT leasing and the opportunity for the channel
ICT leasing removes price as a barrier to purchasing technology, so your customers needn’t wait before  upgrading. What’s more, because resellers don’t have to discount as aggressively to get deals over the line,  margins are protected. Resellers who can offer a combined technology and finance package have the opportunity to open up multiple revenue streams, while customers also benefit from working with a one-stop-shop provider.
I’ve seen sales of $500,000 almost fall through due to a customer’s short-term budget constraints, but by  offering an IT leasing solution,resellers have secured the sale. They not only secured a better outcome for  their customer, but achieved greater profits in the process.
The following is an overview of the key benefi ts of ICT leasing and the considerations your customersshould  keep in mind when looking at technology finance.
Lower costs and better outcomes
ICT leasing enables immediate access to the latest technology, reducing upfront costs and monetary restraints.  Leasing allows organisations to maintain a stronger cashfl ow position and frees up capital for purchases that deliver immediate revenue benefits. In an environment where cash is king, the efficient allocation of budget  has never been more important. In addition, by leasing ICT infrastructure, businesses are able to obtain the best solution for their organisation when it’s needed, not when they can afford it.
Improved flexibility and a reduced cost of ownership
ICT leasing enables businesses to pass on the risks associated with the ownership and disposal of the  technology. Leasing gives customers the opportunity to upgrade to new technology at any stage during the  term of the lease. With the rate of development in ICT being so rapid, the importance of this consideration  can’t be underestimated. Businesses can stay up to date with the latest technology, as well as enjoying the flexibility of being able to change equipment to accommodate evolving business needs. 
Key considerations for customers and resellers
Customers should be careful, because some ICT lease companies charge interim payments before a lease  starts, or automatically roll over lease contracts at the conclusion of the fixed lease period. This can potentially cost thousands of dollars in unexpected charges, so it’s important to partner with a technology finance  company that offers flexibility and transparency around lease start and finish dates.
The end-of-lease period is particularly important, and partners and customers should be sure to work with a finance provider that assumes the cost for collecting technology at the end of the contract period. Many businesses are unwittingly faced with the significant expense of returning equipment at the conclusion of the  lease, causing headaches for both customers and resellers.
While ICT leasing offers a number of benefits and  opportunities for both customers and resellers, it’s  important to note that not all technology finance companies deliver the same quality of offering. Some finance providers, for example, sell hardware directly to customers, competing directly with other members of  the channel.
When in doubt, look for a specialist in the field, with a strong asset backing, proven track record and ability to  offer finance solutions tailored to the needs of your customers.