IT leasing in focus: How does leasing work and what are the options?

You’ve brushed up on the benefits of leasing IT equipment and when’s best to do it. But how do you go about finding the right package for your business, and what kind of choices are you likely to be given by your leasing partner? Here’s a quick guide to what you can expect…

By Mike Laskey May 26, 2020

Before we get started, there’s one key question you need to keep in mind at all times: why do I want to lease?

It could be because having fresh, up-to-date equipment is important to you. Maybe business liquidity is the core reason, or you’re simply keen to save money and cut costs.

There are plenty of advantages to leasing, but it’s vital that you’re clear to yourself about what’s most critical to your company. This will help you secure the right arrangement later down the line when there are key decisions to make and different options on offer.

Crucial conversations

The first step is to get in touch with a reseller or provider that specialises in offering leasing packages to businesses and has good relationships with multiple finance partners.

Naturally, we recommend you contact the experts here at Jigsaw24 (no-one knows B2B IT like we do, after all), so we’ll be basing this article on how leasing works for our customers.

Our team will discuss your requirements with you and get an understanding of the context behind your existing setup, future business plans and indicative budget.

Because we work closely with a range of different finance partners, each of which can offer a variety of devices and terms, this initial stage is crucial – it helps us identify what kind of leasing arrangement will give you the best value and experience.

Introduction time

Once we’ve got to know each other, we’ll get in touch with the right finance partner to get an indicative quote that will best meet your needs and introduce you to each other.

Our partners include finance houses, banks and brokers, so there’s a good chance we’ll be able to connect you with the best leasing solutions available.

We don’t just pass you on, though – it’s important that you benefit from all the IT expertise available, so you should never feel like a provider is merely acting as an unnecessary middleman. In fact, we may obtain quotes from several partners for comparison purposes, so our role here is to help narrow things down and protect you from being overburdened with too many options.

Instead, the contact you’ve been speaking to throughout the process will remain in touch at all times, helping you enjoy clear communication between all three parties and answering any technical queries you have before you later sign on the dotted line.

You can now expect the finance partner to run a credit check on your company, which if successful will precede a formal contract arriving for you to read carefully and complete when ready. Exciting times!

Typical options

But what are you signing up for? While it all depends on the number of devices you need, their specs and how long you need them for, we can outline some of the typical choices on offer that prove popular with customers.

Many only need devices, in which case it’s just a matter of getting all the paperwork sorted, receiving the hardware and then signing a certificate of acceptance to say it’s been received as planned.

Typically, device-only lease payments are made on a monthly or quarterly basis, with contracts often set up to run for two years or more, depending on your circumstances. However, we can generally work with finance partners to offer a range of terms – interest-free payments over longer periods such as four years, for example.

Another popular option is to make a single upfront payment at the start, in order to save on interest and take greater advantage of the products’ residual values. Whereas a traditional cash purchase would see a customer pay 100% of a device’s full value in exchange for its full ownership, this approach allows a customer to pay a significantly lower percentage and lease the item without ever owning it – but because the payments are not spread over multiple years, there are no interest charges to reduce the device’s residual value.

This generally means that the trade-in value at the end of the leasing term would be greater than if payments had been spread, allowing you to then refresh to newer devices on more affordable terms. In a nutshell, making a single upfront payment is a way to take advantage of residual values that are higher than with products you lease and then own to keep after paying interest on them.

Other customers opt to commission one or more of our services in addition to leasing their equipment, which can make it easy and cost-effective to do everything from managing all their devices to getting IT support with remote day-to-day troubleshooting.

In the latter case, many of our finance partners are able to arrange what’s called a “bill and collect”, whereby they collect your payment for one month or one quarter of our managed services up front.

This is an attractive option for customers as it usually negates the need for interest on top of the services’ costs, and means everything is taken care of in the same payment for convenience. The bill and collect approach is flexible, too, so it can be used to add on software, licences, warranties and any other extras you require.

Final factors

Fortunately, there’s plenty you can do if you’re concerned about your own wellbeing, or that of a colleague.

At the end of your leasing contract, you’ll either keep your devices or be able to refresh them for newer kit on updated terms – whatever you decided at the very beginning of your leasing journey with us.

As with any product, the end condition of the equipment you lease is important. But if you’ve taken good care of your devices and they’ve not suffered anything more than regular wear and tear while in your possession, you’ve nothing to worry about!

A second thing to bear in mind is your notice period. As a general rule, you need to give at least 90 days’ notice to kickstart the cancellation period. It’s worth setting clear reminders in the diary to ensure you don’t leave this any later than you want to.

Once notice has been given, we’ll chat with you and the finance partner to discuss your options. Usually, we’ll explain what devices are available to you if you refresh, and on what terms, and then quote for another lease if it’s something you’re interested in.

Should you decide to go ahead with said quote, your existing devices can then be collected by the finance partner for secure data erasure, refurbishment and repurposing. This is great for sustainability and carbon emissions as it means your equipment will enjoy another life, often still within UK markets.

You’ll then receive your new devices on your new lease, keeping you up to date with your competitors and on the latest IT equipment available with affordable regular payments.

Simple and straightforward!

Interested in leasing IT equipment? We can help you get the right devices on terms that suit your business. Get in touch with the team by calling 03332 409 214 or emailing business@Jigsaw24.com. For the latest news, follow us on LinkedIn, Facebook and Twitter.