The costs associated with the technology that is vital to the efficient operation of a business, and which is rising with the declining rand, can be combated through the selection of a financing option from your supplier, says Guy Whitcroft, managing director of .
According to Whitcroft, there is an international trend towards financing technology purchases. "Around 60% of IT is financed internationally. Reasons for this include financial restrictions, tax optimisation and increased liquidity," says Whitcroft. He notes that the trend applies to both large and small enterprises.
The benefits of a financed IT purchase are numerous, both to the reseller and the end-user, explains Whitcroft. Through financing, resellers can provide a better deal for end users with the options of including software and services, thus deriving better margins.
"Additionally, the reseller is generally paid for the equipment within seven days," he says.
End-users would opt to finance their IT spend as it is more effective use of capital. "Through financing, the end-user is eligible for tax advantages and the IT spend is off balance sheet. Furthermore, the client benefits from increased flexibility, upgradeability and convenience, while hedging inflation through affordable monthly payments on the equipment required, rather than waiting for cash to become available later," states Whitcroft.
The options available for financing your IT budget through Tarsus` in-house finance company, MB Tech Finance, include non-escalating rental, escalation rental, de-escalating rental, deferred rental, rental-free period, rental with residual value and rental with up-front balloon payment. "A consultation with a finance expert will ensure that the option that best suits your business requirements is selected," he says.
Whitcroft says that on an IT spend of R750 000 on an escalating (10% per annum) rental agreement can result in a saving of R115 200 over a 36-month period. "Financing typically means a 15-17% saving on the IT installation, when compared with paying cash - a `discount` that is simply not available in any other way. Financing really makes sense in these times of tight liquidity, coupled with an increasing demand for IT spend to compete globally," he concludes.
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