071 899 6315 :anesh@atbusinesssolutions.co.za

What is the Best Way to Purchase IT Stuff for my New Business?

Congratulations! You have decided to disrupt your life by doing what most folks will only dream about, you want to own a business.  You have your, product, business plan and location has been found. “Hang on a minute”, you echo within yourself, “I have to consider many expenses, how am I going to factor in the purchasing of expensive IT equipment?”

In my experience, this essential overhead is often overlooked in the initial stages of a new business and the extra cost comes as a surprise to the new business person. Rental Finance is a solution that has been developed for businesses so they may rent the needed equipment over a period time. If we consider that Moore’s Law  is shrinking more rapidly with time, thus IT equipment depreciates in value faster than you can say,”I just bought the new 6th generation  i5 processor”. Using the i5 processor rhetoric, you notice that the chip names  (i3, i5, i7) are constant, however this name is suffixed by a further descriptive number, the higher the number the newer the processor. Therefore it might not be wise to invest your precious startup capital on equipment that will be worth zilch in just a few short months. That’s where rental finance becomes a real option. Businesses or self employed individuals have the option of renting the equipment over a term, usually 12, 24, 36, 48 and 60 months.  If equipment needs upgrading, it can be done before the full term of the rental is reached. Businesses can rent, Laptops, Desktops, Printers, servers and pretty much any technology that will contribute to the growth of their business.

Rental Finance come with further benefits

  • Working capital remains intact and no deposit is required.
  • Rentals are not balance sheet items and consequently do not require Capex approval.
  • The business is always equipped with cutting edge technology.
  • Initial monthly rental fees can be reduced by applying an annual escalation, supported by the additional turnover generated by the equipment acquisition.
  • Rental implies not only that cash outflows are minimized, but that they become predictable, thereby enhancing the reliability of the firm’s business plan.
  • Existing credit lines are unaffected.
  • The monthly rental fee is tax deductible and no more than a small percentage of an up-front cash price.

So don’t despair, the avenues are there to support your success, keep moving forward and don’t give up. As the saying goes, “There is no can or can’t, only will or won’t!”

 

 

*AT Business Solutions provides rental finance for all qualifying clients. 

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