Financing Computers for Business?

Mercutio asks: "OK, I've been handed the responsibility of acting like a grown-up and changing from my normal day-to-day IT job to actually making decisions involving someone else's money. Specifically, I've been asked to deal with all the variables associated with purchasing/leasing computer equipment (desktops, laptops, printers etc) and I'm feeling a bit out of my league. Anyone have any tips for dealing with leasing or financing equipment, companies to avoid working with, or mistakes made in past leasing/purchasing arrangements? Any company that was really great to work with? Any help is of course appreciated. Thanks."

Comments

GE Capital

[gmhowell]

GE Capital wasn't bad to deal with. Can't remember who we use now (Also can't remember why we switched. Or if we did. It's been a few years since picking up a new lease on equipment). A couple of things to recommend:

Make sure vendor doesn't get a good portion of the money until AFTER the contract is fulfilled. We had a big problem with this. Partially our fault, partially the lease company (not GE in this case). Which leads me to number two: make sure the finance company is dealing with only one person: YOU. YOU are the one who has to sign off when various stages of delivery are met. You are the one who has to be happy. They are not to send a dime to the vendor unless you say so.

Talk to your accountant. He can best explain to you what the terms should be from a tax and cash flow basis. Any advice to the contrary should be taken with a grain of salt. CPA's speak the language of the IRS.

Have a good idea now if you will be keeping or returning the stuff at lease end. If returning, budget for saving all those boxes. It will make life much easier. We always buy out at the end of the lease, so we pitch the boxes (saving a couple for shipping in case of bad unit after the lease is final). When making this decision, don't forget the cost in 3 or so years of reinstalling all these machines.

One thing I could never get an answer to: who owns the licenses, you or the lease company? I have a feeling this is something that may become an issue in the future. My reading is that all of the equipment is the property of the lease company. Reading the standard MS licenses, they may not be sold, transferred, leased, etc. Considering you are a random slashbot, I doubt you have a site license. But I could be wrong. Our policy: if M$ comes knocking, block the door. If they show up with subpoena's, torch the building. Actually, we have more licenses than machines running MS OS'es, but they are poorly documented.

See if you can swing a service contract for the length of the lease. It really pisses off CEO's to be paying for machines that are dead and/or costing money to repair. Also, your lease company might require it. BTW, this also depends on the savvy and time availability of in house folks.

To sum up:

1. Hold back some money (25% is a good amount) to make sure the vendor satisfies you.
2. Make sure one person and one person only can release money from the leasing company to the vendor.
3. Talk to CPA.
4. Begin making the decision now whether to buy out lease or return equipment.
5. (optional) Talk to attorney about licenses.
6. (optional) Consider service contract for length of lease.