Technology equipment rental is an ideal way for companies to ensure they have access to the best equipment available, and enables them to optimise their technology budgets without sinking capital into a rapidly depreciating asset.
That’s according to Philip Vermeulen, chief operations officer at Itec Finance. Itec Finance provides financial services to all members of the Itec Group and its clients.
He says that in the office automation equipment space, technology rental is a proven and mature business model that delivers a wealth of financial and operational benefits to companies of all sizes.
Vermeulen says that office equipment – such as printers, multi-functional devices and telecommunications equipment – is ideally suited to the rental model because it rapidly becomes obsolete and is not a core, income-generating asset for most businesses.
Renting this equipment rather than buying it allows organisations to preserve their capital for investment and growth, he adds.
“The rental model moves office equipment off the balance sheet, benefiting the organisation in a number of ways,” says Vermeulen. “Rental is typically a tax deductible operational expense, in turn generating a healthier return on assets.”
Another benefit of the rental model is that it allows companies to upgrade or replace equipment when it is convenient or necessary to do so without incurring unnecessary costs.
“You are able to take advantage of new technology with better performance or more capacity to accommodate the needs of your business, without needing to write off your old equipment,” says Vermeulen.
Equipment obsolescence and depreciation risk is carried by the hirer. At the end of its lifecycle, the hardware is returned to the hirer, alleviating the need to dispose of obsolete equipment, Vermeulen adds.
Companies should look for the following qualities from companies they enter into technology equipment rental agreements with:
*Flexibility – the hirer should be willing to craft rental agreements that provide the client with the flexibility to upgrade office equipment that no longer meets its needs. Rental agreements should provide for the fact that business needs change.
*Track record – companies should deal with technology rental specialists that have an established track record. Some companies have burnt their fingers with suppliers that have a short-term focus – those that have a long history with an established client base are the safest to partner with.
*Financial stability – an organisation that offers technology rental services must be financially stable. There have been many examples where smaller rental service providers have been forced to sell their rental agreements to a third party due to financial difficulties.
This may compromise a client, both from an operational and financial perspective.
*Scale – companies should choose rental partners that are big enough to meet their present and future office equipment requirements. Needing to partner with more than one rental firm adds unnecessary complexity into the mix.
*Reputation – good technology rental firms will usually be known in the marketplace for the quality of the service they provide, and the ethical manner in which they conduct business.