The concept of rental.

The basis of any operating lease is a rental agreement where the lessor pays periodic rentals for the use of assets. The risk inherent in ownership of the assets rests with the lessor. No bargain purchase option is negotiated at the time of inception of lease. There is no residual commitment on the part of the lessee. Operating leases must meet the criteria specified by prevalent accounting standards of the country.

Companies benefit by using technology, not owning it

To keep the competitive edge, businesses must continually invest in technology. Often, vast amounts of unutilised equipments taking up valuable space at a high cost to company.

In today’s fast-moving business environment, companies are finding it increasingly challenging to keep up with an even faster pace of technology advancements as IT hardware manufacturers and software developers continuously introduce new and better equipment to make users more productive. The useful lifespan of IT equipment has been steadily declining. This is coupled with a continuing drop in acquisition costs -because what you pay for today is worth less tomorrow, never mind in a couple of years’ time.

These trends clearly indicate that ownership is no longer a viable option for companies intent on staying current with new technology, or those who wish to reduce the operating costs of technology.

Businesses should commit capital to investments that provide a return!

This makes investing in technology counter-intuitive because purchased technology is expensive. First there’s the cash layout on the initial purchase price of hardware and software, add services, warranty, maintenance, forgotten contractual terms and conditions and upgrades. Then at the end of an IT asset’s usefulness, there are the costs and overheads associated with removing and disposing of the obsolete hardware and introducing the new, upgraded system. Add the cost of downtime, or related issues, when technology ’expires’ and businesses do not upgrade to newer technology, or even, the cost of downtime during migration. What about shipping and documentation? Another question is how much income generating business could have been acquired for the cash” that’s being laid out for technology equipment?

What’s the alternative?

You no longer need to purchase a blanket of brand new technology; or pay large sums of cash upfront; or even buy your equipment through a traditional banker’s lease. RentWorks understands finance and we also understand technology and how it addresses your business needs. RentWorks works for business in the procuring, financing and management of your IT equipment. You gain greater financial control and avoid equipment obsolescence. You could choose to receive a cash injection for your business through a RentWorks Sell and Rent Back programme. Implement a structured cycle of equipment renewal with the RentWorks Exchange Plan. Choose the option of off balance sheet reporting and stepped payment plans -and even insure and track your, rented assets with RentWorks Online Contract Management to disclose every cost and every saving.