Schools Can Stretch Their Budgets by Leasing IT Equipment

By Michael Lockwood

computer classIt’s not a secret that school systems across the country have been struggling with their budgets over the last four years. Unfortunately, many schools have been forced to continue to use aging and outdated equipment for financial reasons . However, by carefully weighing the pros and cons of leasing IT equipment including desktops, tablet computers, iPads, servers, laptops, wireless networking solutions and more, many schools may find they can stretch their budgets further and get the equipment they need now by leasing.

Here are issues to consider in the lease-versus-buy analysis:

  • There is an implicit cost of money component to leasing which should be factored in to the analysis.  Obviously leasing isn’t free.  However, today leasing certainly is cheap.  With interest rates at historic lows, a school districts cost of funds is also very low, making the decision to lease often even more attractive.
  • Leasing is a good way to stay current and refresh technology.  With a lease with a $1 purchase option, the IT equipment tends not to be refreshed.  But with a lease with a fair market value purchase option, the refresh decision has to be made.
  • Consider fair market value leases (which tend to be cheaper) for equipment with a limited useful life (like notebooks), but $1 purchase option leases for IT infrastructure.
  • Ideally, negotiate an end-of-lease option that allows a purchase option for some items but not others – defer the decision so you can truly evaluate the equipment throughout the lease term.
  • We find that many students want to buy their notebooks at the end of the lease rather than return them, even if the notebooks are 3-4 years old.  Some students don’t.  Negotiate a fixed price end-of-lease option for this if you can.
  • Be careful of extended warranties.  Some don’t cover liquid spills, cracked screens and drops.
  • In almost all cases we recommend that schools customize lease terms.  Most leasing companies—including TEQlease Capital–can and will provide a leasing solution customized for what your school needs.

What questions do you have about leasing? Please contact us and we will walk you through the options.

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