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How Does a Technology Lease Work?

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By Chris W on August, 1 2022
Technology Lease Benefits

Over the last several years, evolving technology has brought about rapid advancements in speed, efficiency, new features, and overall quality...especially in digital equipment. It can be hard to keep up. 

Every 2-3 years the changes are significant enough to consider an equipment upgrade. However, sometimes it's tough to justify the additional expense when you're operating within a budget. That's where the Technology Lease comes into play.

What are the advantages of a Tech Lease?

With equipment that rapidly changes, the benefits of lease vs. buy are huge. Leasing this type of equipment is often smarter than a cash purchase. You can set up financing to keep the door open for upgrades as technology changes. (Without burning through your bank account or getting stuck trying to sell outdated equipment.)

Here are the top 4 perks of Technology Leases:

// 1. Keep your options open //

With a Technology Lease, you can purchase, return, or exchange your equipment at the end of term. Your choice!

This structure allows you to assess the market 24-36 months down the road to determine if you're ready for an upgrade. The term length is key as it allows you to make those assessments before the equipment is too far out of date and obsolete to return or sell.

2-3 years into your term, ask yourself:

What improvements or efficiencies have been added?

Are they worth acquiring the newest model, or will our current equipment suffice?

If you opt to upgrade, we'll help you get an order placed with your equipment vendor or manufacturer. The used (outdated) equipment is returned.

Should you decide to keep your original equipment, no problem! We can explore buyout options to find a solution that works with your budget.


// 2. Stay competitive (and up to date) //

With affordable monthly payments and seamless upgrade options, a Technology Lease allows you to leverage technology more easily than if you'd purchased the equipment in full, up-front. Staying up to date with advancing technology allows you to operate more efficiently and expand what you can offer your customers...setting you apart from the competition.


// 3. Tax incentives //

A Technology Lease is considered an operating lease. This type of structure allows you to expense and write off the full monthly payments as an operating cost (every month), for the life of the term.

Traditional financing (or paying cash) is subject to standard depreciation, as it's considered a conditional sale. The write-off is slow and drawn out over a standard 7-year schedule - which is great for equipment with a long useful life. For the equipment we're talking about, however, you'll get more bang for your taxed bucks by expensing monthly payments.


// 4. No usage restrictions //

A Tech Lease doesn't come with usage restrictions (like a leased car's mileage limits). Use it as much as you can! Heads up: to return for upgrade we do require the equipment is still functioning as it should.

When is a Technology Lease not a great option?

This finance option is ideal for the rapidly evolving equipment world. (Cardio equipment, digital printers, etc.)

We typically wouldn't recommend a Technology Lease for assets that see minimal change over time and have a long useful life. (Embroidery, screen printing, laser engraving, CNC routers, strength equipment, etc.) For these types of equipment, we'd recommend traditional lease finance options.


If you're in the market for new equipment and would like to look at all the finance options available, we'd be happy to walk through some different scenarios with you! We'll take the equipment, your budget and potential tax needs, and more into consideration.

We specialize in custom finance solutions and look forward to earning your business.

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