Yellow Arrow Technical Services are registered under the Consumer Credit Act and are Licensed Credit Brokers. This give us the facility to arrnage finance packages to help you spread the cost of IT purchases. We have access to a number of finance providers so we are confident that we can help you find the right package. If you have an existing provider we will be only too happy to work with them for future purchases.

The Benefits of Leasing

There are two different ways to lease IT products; Lease Rental and Lease Purchase.

Lease Rental

Lease Rental means you pay a monthly/quarterly rental fee in advance for three or five years subject to your preferred term. Lease Rental actually means you never own the equipment and at the end of the term your account manager will contact you and ask if you wish to extend the life of the current equipment or replace it with new equipment. Although most companies using this facility often replace the equipment at the end of the term. You can simple terminate the agreement at this stage.

Lease Purchase

The second option is a Lease Purchase which effectively works in the same way as the lease rental option but at the end of your term you will own the asset.

Both of the above options allows you to add products to your current agreement over the entire term and the regular payment is aligned to the current contract period or extended.

Through Yellowarrow you are able to lease not only hardware but also software and services. For example, enhanced maintenance installation and support for the duration of the agreement would be incorporated in your regular fee.

You can also lease your existing equipment through a re-capitalisation program.

The core Benefits of Leasing -

You can lease new equipment and you pay a monthly/quarterly price between 2 and 7 years.

Technology products frequently become obsolete before they can be fully depreciated. That means you either have to take a book loss on the equipment or carry a 'stranded asset' on the books. Leasing allows you to take advantage of the latest technology available while giving you the flexibility to make changes and additions when needed. Leasing protects you from the risk of technological obsolescence because the leasing company assumes that risk for you. You get all the benefits of using the equipment without having to worry about what to do with it when it is out of date.

Leasing simplifies budget approval.

Leasing can be categorised as operating expenses. That means it's usually much easier to attain approval to lease equipment, rather than purchase it, because operating expenses generally require a much lower level of approval (department level vs. corporate) than purchases.

Leasing can allow for off-balance-sheet financing.

As long as your lease passes the FASB 13 test for operating lease treatment, the lease commitment and corresponding assets won't have to be included on your company's balance sheet. This can improve your financial ratios, showing the company to be more profitable with more liquid assets.

Leasing reduces up-front costs.

Conventional bank financing typically requires a minimum balance. With leasing, there is no minimum balance or down payment required.

Leasing makes cash flow more predictable.

Leasing generally sets fixed payments for the term of a leasing contract, whereas a loan often has a variable interest rate. Thus, leasing makes it easier to manage and anticipate cash flow.

Leasing preserves working capital.

Leasing expands your company's financial resources without affecting established credit lines. A helpful rule of thumb is to buy only assets that appreciate, and lease those that depreciate. Why buy an asset that has limited life, when you could lease it, and invest your available cash in assets that will appreciate in value. When you lease, you get full access to the equipment you need for your business, and you only pay for the portion of the asset that you use rather than the entire asset. Leasing offers tax advantages. Many companies realise significant tax benefits from leasing their technology. Monthly lease payments are generally tax deductible and can be treated as a business expense. Consult your accountant or tax advisor for specific details on this important benefit.

Leasing gives you the ultimate financial flexibility.

With leasing it is possible to structure the terms and length of the contract to fit your business requirements, and you can upgrade the equipment or add additional components to certain types of lease. When the lease ends, you can choose to return or buy the asset, or to renew the lease for another term. Leasing is the least restrictive, most flexible financing alternative, and gives you the freedom to make changes and choices that suit your needs.

If you require any further information or advice on which product is best for you, then please contact us.