What Computer Leasing Companies Don't Tell You About Computer Hardware Leasing [aboutcomputer99.blogspot.com]

What Computer Leasing Companies Don't Tell You About Computer Hardware Leasing [aboutcomputer99.blogspot.com]

Question by ;alksdjf;: How do i lease OUT a computer? I am opening a small business that does pc repair/sales. Ive been thinking about leasing out computers to people alot lately. Do you think it would be a good avenue to go down? and do you have any contract / percentage ideas? thanks for ur help great answer jen, do u think 10% would be a good interest rate if it was rent to own? Best answer for How do i lease OUT a computer?:

Answer by jenny79_123
Is this short term or long term? With service: To lease to companies...typically the computer leases i've seen include service on the computers. companies like it because of the package deal type thing. 1 fee a month and they are taken care of. ... Otherwise they could just buy their own, they're relatively cheap as u know. So basically you're getting them to contract you for a certain amount of service in this instance.. which is where the real profit is. In this case, you can factor in that you own the computer, and only charge them interest + a financing fee. So the computer portion of the contract would be like 800*15% = $ 48 = 4/mo. Then your contracted fee.. after you estimate the number of hours you'll spend on each computer each month.. say 2 hours/computer/mo at $ 100/hr so total fee/mo for a computer, all service included = $ 204 (basically a service contract, but the computer is an incentive for them to sign it) Without service: Otherwise if you don't contract to perform service on the computers. don't use an interest rate %, instead use the value of the computers/life of the computers (because the computers will be relatively worthless at the end of the lease.)+ the financing fee they'd pay (10% typical corp. credit card rate), plus one of your own for doing the work in obtaining them, maybe 5-10% a financing fee, (800 *1.20)computer / 5 years = $ 16/mo. Plus you'll need to get new contract documents written up. You're taking on new risk. If say a part breaks in one of the computers.. you're liable to fix it. Although you can write into the contract like that you will install things that break, but they'll need to buy them, etc.... But at the end of the lease you'd own them. It may not be worth it. For short term.. like 1-2 week rentals, its probably definitely worth it, since you'd have them lying around anyway, and not as much can go wrong in 1-2 weeks for you to fix. Although wear and tear might go up a bit. Test it out.. try something small or short term first. good luck! good question. Was curious how companies get this rolling.. i've only ever seen it in action. It works ok. but companies only tend to do the rental if they have serious cash flow issues.. also an added risk for you.

Answer by saved_astronaut
I'M not sure if leasing out computers to people is such a good idea. they can destroy yer property, & they can even sell it, leaving u w/o what's rightfully yours. i'd NEVER turn my pc over 2 some 1 else UNLESS I was SELLING it 2 them, cash up front B4 getting it.

[computer leasing]

Because most Canadian business owners and financial managers aren't tech savvy they are often intimidated and confused by computer leasing companies and computer hardware leasing. We also are always amazed when clients don't know that computer software can be financed also - not everyone knows or tells you that. If a certain computer leasing company does not by policy finance software, guess what, you have other financing options for that part of your purchase.

You have made the decision to lease of finance your technology, which might include hardware, software, telecom equipment, routers, etc! One of the key drivers in your decision is of course always the tremendous cost of capital equipment acquisition in technology. And it's not as if that's an appreciating asset on your books. Have you checked out computer and technology prices - performance goes up and new models come out every year, and price comes down. Other than absolute cost that is of course good new s.

What most lease companies don't tell you is that you have a number of key decisions to make when you lease technology, and their firm might not necessarily be the best one to finance your purchase. Why is that? Simply because financing companies are not technology companies, they are driven by pure return on invested capital. They make money via the actual interest rate on the transaction, as well as the sale of your computers at the end of the lease if you have entered into a fair market lease. (More about fair market leases later)

Other ways in which the lease company makes money off your firm is the ability to lock you into a relationship whereby you become a repeat annuity customer for additional technology financing. Other subtle and minor profit generators for lease firms that you might not know about are:

Interim rents Pre-pay penalties Admin fees Excess use and refurb charges,

Etc!

Let's move on to major secret # 2 that yo ur computer lease company might not tell you about. That issue is based around the concept that you want to use technology, not own it (Why would you want to own a depreciating and obsolescing asset?). The solution that drives and solves that problem is the previously mentioned fair market lease, otherwise known as an operating lease. That more often than not, for a significant computer lease financing is the best solution for your leasing needs in technology. But guess what; we feel that probably 90% of firms don't offer that solution, because it involves being a specialist in asset and residual values. Finance lease companies tend not to know too much about the bits and bytes.

Therefore you should ensure that you have options in your lease proposal that identify whether you can finance on an operating lease basis also. It might not necessarily make sense for a small purchase, but a larger acquisition should consider this strategy.

Another significant benefit of leasing in general applies to computer leasing, which is that miscellaneous add on's can be financed - they include shipment, install, warranty, etc. Not every firm allows you to finance these, most will. And, as we mentioned, don't forget, Software can be financed!

Investigate carefully the financing of technology - these assets are expensive, depreciate, and you do not want to make an improper financing decision for technology that is driving your accounting, sales and customer relationship data.

Speak to a trusted, credible, and experienced business financing advisor to make sure you know the ' secrets' of computer lease financing.

Related What Computer Leasing Companies Don't Tell You About Computer Hardware Leasing Issues