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Equipment Capital Consulting, Inc.
Lean times for state budgets make leasing software and information systems a smart alternative. With tax revenue down, and budget cuts looming, state funding has been especially hard hit. Administrators can use lease financing as a strategy to support the computing needs of library operations without draining current year fund allocations.
Why Lease Your Library Automation System?
With technology systems so critical to the support of libraries and education, what can libraries gain from a look at leasing versus the more traditional method of purchasing? Leasing is fast becoming the preferred method for acquiring software, technology equipment and systems needed by business, education and government.
Leasing accounts for approximately one-third of all capital expenditures in the United States because corporations, schools, libraries and governments are becoming more aware of the many different advantages, benefits, and options offered by this creative form of financing. Each year state and local governments and their agencies acquire hundreds of millions of dollars worth of equipment via leasing.
The following are just a few of the advantages that make a leasing alternative attractive to the education space:
- Convenience - Leasing offers many conveniences over conventional forms of financing. Cash flow projections are made easily when leasing since most leases have fixed equal periodic payments. Acquiring assets through leasing may involve less red tape and time than conventional financing. Leasing offers the flexibility to pay for equipment that is currently needed over time rather than acquiring equipment through purchasing which limits the amount of equipment that may be acquired to the current year's available budget.
- Affordability - Incidental costs of acquiring equipment, such as freight or installation charges, as well as software, implementation and consulting services and manufacturer support can be included as part of the lease. This eliminates the necessity of a large cash expenditure or down payment which is typical in most purchase situations. Obviously, in a credit-tight economy, reducing large cash down payments or other incidental costs allows the library to employ its cash or savings for other more profitable uses.
- Improved Fund Balance - Similarly, many state governments as well as subdivisions such as libraries are required to have special capital appropriations made by the legislature or decision-making bodies to acquire equipment through purchasing. These capital appropriations are generally made once a year; thus prohibiting mid-year acquisition of technology equipment. In these cases, leasing is a good solution because the lease payments can be paid out of the operating budget rather than the already depleted capital acquisition appropriation. Leasing also provides the ability to finance essential technology equipment without incurring "debt" or "indebtedness" that is subject to board approval. This is accomplished because lease payments are subject to annual appropriations, and as a current expense item, lease payments are not considered debt.
- Lower-level Decision Making - Libraries which wish to acquire software or equipment, but who do not have the appropriate authority to expend the necessary level of funds, find leasing to be a convenient method of acquiring software and technology equipment. Through leasing, libraries are able to make monthly lease payments which often fall within their spending authority guidelines. Libraries may be able to move forward with the acquisition of equipment and services without using capital funds, saving time and money.
A well-structured lease can help libraries effectively respond to the changing technology curve while keeping the acquisition within budget constraints. Payments can be structured to reflect the library's cash flow requirements.
The Advantage of Equipment Capital Consulting, Inc.
A big advantage of leasing is that with some innovative thinking regarding flexible arrangements, Equipment Capital Consulting can offer:
- Deferred payments - Purchase now, make the first payment 3 months to 6 months later.
- 100% financing - Include installation, maintenance, and other expenses.
- Flexible Terms - Terms can be from 12 to 60 months.
Additional Information
For more information, please contact:
Joe Gehley
Vice President Marketing
Equipment Capital Consulting, Inc.
888-844-3224 x 220
Or download the ECCI Brochure or Lease Application:
Equipment Capital Consulting, Inc. Website: http://www.eccilease.com
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