Computer equipment leasing helps school districts gain financial edge

Aug. 26, 2011 - PRLog -- With real estate values across the nation dropping, local governments are sometimes hardest hit, forced to adjust appraised valuations downward and, therefore, collect less revenue through property taxes. By extension, local school districts, often supported through local property taxes, are feeling the pinch, too, forced to make cuts while struggling to maintain quality educational opportunities for their students with the latest equipment, especially where technology is advancing rapidly, like computer equipment. Because it advances so quickly, it is difficult though still imperative that schools have the latest computer technology on hand for both staff and students.

Computer equipment leasing is a smart financing vehicle that some school districts are starting to employ as a means both to save money and assure their computer and IT equipment needs are met with the latest available technology.

For instance, the Bethlehem, PA, school board voted earlier this month to lease computers from Apple Inc. for its teachers, administrators and high school students, rather than renew the current lease or acquire new computers. In so doing, the school board estimates it will save some $2.4 million over the course of the four-year lease period, versus the current arrangement.

“Leasing will help spread the cost of the computers out over time,” said Frank Arbushites, Director of Information Technologies for the school district, adding that the district has the option to buy the computers for $1 apiece at the end of the lease.

The Hanover, PA, school district faced a similar challenge of a reduced budget and having to replace six-year-old computers that had become obsolete. “These computers, after six years, are really starting to show their wear and tear,” said Ron Hummer, the district’s network systems administrator.

Instead of buying replacements, the board opted to lease 150 laptops from Apple for $40,000 per year, for a total of $160,000 over the life of the lease. Additionally, Apple agreed to delay the first payment until the start of the 2012-13 budget year, thus enabling the school district to upgrade now rather than waiting. Apple also agreed to buy back the old computers for $150 each as part of the deal.

Both school districts and businesses today have found that there is a broad range of new and used computer equipment leasing options. With hundreds of financial services companies, local and regional banks, independent equipment leasing companies that focus only on equipment leasing and manufacturers leasing plans, financing businesses today provide lots of options to choose from. Computer equipment leasing can also help save precious cash, taxes and allow businesses and schools to invest in higher quality, more cost effective computer and IT equipment.

According to Equipment Leasing Now, there are a number of good reasons, both for schools and businesses, to lease computer equipment today, including:

   * Low Monthly Payments: Leasing allows use of equipment without having to wait to pull together the full cost of the equipment, and often requires lower payment than other methods of financing. Best of all, it often means being able to afford higher quality equipment that is more cost-effective to operate.
   * Acquire Equipment Without Tying Up Capital:  Where other types of financing require a hefty down payment, leasing is 100% financing. Most lease agreements require an advance of only one or two month’s payment plus a security deposit. Leasing puts the equipment to work immediately, at a minimal up-front cost.
   * Protects Lines of Credit: Lease payments have no impact on credit lines. Borrowing power is preserved for other opportunities.
   * Helps Maintain a Competitive Edge: The latest and best equipment means getting the job done faster, more efficiently and cheaper than the competition.
   * Eliminate Obsolescence: “The newest innovation” doesn’t always stay new. Leasing gives access to today’s best technology and then enables upgrades when the equipment has outlived its advantage.
   * Take Care of the “Hidden Costs”: Leasing means more than just the equipment. It also can cover the cost of delivery and installation. The lease includes everything it takes to actually put the equipment to work.
   * Lower After-Tax Cost: Purchases are made with after-tax dollars. Lease payments are usually considered a pre-tax business expense and as such may reduce tax obligations.
   * Simplify Accounting: Lease payments are little more than a line item in the monthly cost of operations – a minimal bookkeeping effort that frees businesses from time-consuming depreciation schedules.
   * Guard Against Market Conditions with a Fixed Payment: Remember 1980, when interest rates skyrocketed from 9% to 21.5% in a single year? Unlike bank lines of credit with variable rates, lease payments are fixed – no matter what happens to the market tomorrow.