With a decision to finance your technology, you are given the choice between a Standard and Finance lease. These different options both have unique benefits to you and your decision should ultimately be made based off of your intent with the equipment.
A Standard Lease is commonly known as a Fair Market Value (FMV) lease. This option is typically the most cost-effective and you have three different end-of-term options that include:
1) Purchasing the equipment at its fair market value
2) Returning the equipment and refreshing your technology
3) Extending your lease on a month-to-month basis
The name “Fair Market Value” refers to the purchase option that you have at the end of the lease. If you would like to purchase your equipment, you can choose which hardware to keep and which hardware to send back. The option to refresh technology is most commonly chosen at the end of the lease and it allows you to continually have newer technology.
A Finance Lease is commonly known as a Dollar Out Lease. On average, it has a 10 percent higher cost than an FMV option, but you will own the equipment for a total of one dollar at the end of the lease term. The dollar never actually exchanges hands; it’s just a technicality that prevents the lease from being classified as a loan.
Because technology is constantly evolving, obsolescence is a concern that many IT administrators have. Businesses do not want to be stuck with old equipment or deal with the hassle of disposing of it, so a Standard Lease will allow you to have flexibility to expand and upgrade your technology on an ongoing basis.
If you see ownership as a benefit, the finance lease will provide you with the opportunity to own all of your equipment for a dollar at the end of the lease.
If you would like to discuss further leasing options and determine which one is right for you, please contact either firstname.lastname@example.org or call (800) 347-0628 and ask for a VAR Technology Finance Leasing Specialist.