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Renting IT equipment boosts cash flow


Johannesburg, 24 Feb 2015
Read time 2min 50sec

Many of today's most successful businesses from SMEs to their enterprise counterparts are renting instead of buying their IT equipment, because this option helps companies get their hands on the assets they need today to remain competitive in this tough economic environment.

"Renting gives businesses the choice to invest in core business activities or in appreciating assets that are needed to carry out business functions without huge capital outlays," says Shane Merriman, Managing Director of InnoVent Rental and Asset Management Solutions.

"Renting is a really good way to save cash when starting a new product line for instance, or even just opening up another office. When faced with the need for the latest and greatest technology and the need to save money, renting is the best way to meet your equipment needs and keep you within a budget.

"It also ensures that you always have the best equipment, be it desktops, laptops or other hardware without running the risk of investing fortunes in machines that will be obsolete in a few years," he says. Most IT equipment has a finite lifespan and according to a Gartner report, 80% of costs regarding depreciating assets occur after the initial purchase. Tying up your funds in rapidly depreciating assets will cost you in the long run.

"Technology is forever evolving and trying to keep up with the pace of change and the maintenance of the equipment can be prohibitively expensive and a huge financial drain. If your organisation is dependent on cutting-edge technology, renting is a far more sensible option than buying the technology outright."

Some benefits on a rental include:

* Reduced total cost of ownership
* Improve cash flow
* Payments and interest rates are fixed
* True off balance sheet finance
* You can acquire more assets while conserving cash

There is little doubt that renting IT equipment is a good business move and a cost-saver. This is particularly true for any business that often finds it has to stretch its budgets over a multitude of operating costs such as staff, training, office space rent, advertising etc. "One way to keep cash in your business is to rent the essential IT equipment. It is cost-effective and far less expensive than purchasing outright," adds Merriman.

He points out rental has an added benefit when it is coupled with a true asset management company. "There are a number of things to consider. Not only does asset value depreciate with time, there is insurance to think about, maintenance, disposal and storage of redundant assets.

What will you do with old equipment? Do you know where all your equipment is? Are your assets comprehensively insured? With asset management, overseeing all of this is made simple. Ensure that your rental provider offers you a complete rental and asset management solution that has the capability to administer the life cycle of your assets to deliver cost savings in the long run."

Editorial contacts
Qrent Lindeni Mabika lmabika@innovent.co.za
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