With everyone working on tighter budgets and being asked to do more with less, finance is a readily available and efficient way of upgrading to new technology – in fact over 90% of our customers use some sort of financing to procure the latest products from us. Below are the different options available:
This option makes sense if the organisation is cash rich, doesn’t foresee any changes to the running/administration or size of the organisation within the next 5 years and generally keeps technology for as long as possible before replacing it. By purchasing in a one off payment this avoids any interest on procuring the equipment.
This is the most popular and straightforward type of finance agreement. The purchase cost is split over equal payment over a 1 – 5 year period. These payments are made in advance and the most popular (and cheapest) option is to pay quarterly. At the end of the agreement the equipment is returned to the finance company and new equipment is procured.
As there is very little residual value in office equipment it makes sense to return them at the end of their usable life and start a new agreement and upgrade to the latest technology.
Consult with your accountant as there are tax advantages to a lease rental which can often offset the cost of interest.
Total Volume Plan
This finance plan allows you to combine the capital procurement cost of the equipment into a cost per copy/print, which when added to your maintenance cost per copy/print gives you one ‘Total’ cost per copy. This agreement provides an agreed upon number of copies/prints per quarter and you pay one cost per copy/print and no separate lease. The agreement ends either when the total number of copies/prints have been used or the fixed period of time has elapsed – whichever is reached first.
This is particularly useful for companies that are growing and printing/copying more, so that as their usage goes up and the machines are worked harder, they are able to replace their devices with newer ones sooner. It is also useful for those that like to cost out the cost of prints to departments or for a print shop as it is easy to include the capital costs in the allocation.
This is only available for Schools. Current legislation states that Schools are unable to enter into a finance lease and must borrow using an operating lease. United Business Group are one of a very small percentage that have passed the strict criteria in order to offer an Operating Lease. Unless the School is run through a private company or charitable trust, this is the only way a School may lease photocopy and printing equipment.
Whichever of the above options are chosen, there will additionally be a service agreement that runs in conjunction with the finance period to provide maintenance and service on the hardware & software. Read more here.