Hardware-as-a-Service (HaaS) can be a great way to streamline your equipment procurement operations and secure predictable monthly payments. Whether you’re looking for lower monthly payments, freed-up capital, or new technology on a recurring basis, hardware subscription services could be the answer.
As you’re considering whether HaaS is the right option for you, you may be wondering what the process is like to enter into a hardware subscription service agreement. For those who haven’t done it before, there may be a lot of questions. But, good news — it’s a lot simpler than you may think. Here’s what to expect as you get started with HaaS.
Partnering with a Hardware Subscription Provider
The first thing you’ll do once you opt for HaaS is to find a reputable provider. Look for someone who has extensive experience, has a strong network within your industry, and who can help advise you on the right hardware for your needs. Having a provider who understands the hardware, has relationships in the industry, and knows your business needs will be invaluable during the device procurement and roll-out period.
Understanding the Terms and Agreement Process
Similar to other financing options, hardware subscription services will require a look at your company’s credit history. If you’re unsure about whether you’ll qualify or if you have other concerns, ask the service provider to talk through qualification criteria with you.
To prepare for the meeting, have all of your company’s financial information ready prior to the application process. You’ll have to be creditworthy to enter into a financing agreement, which will be determined by the size of the transaction after the provider reviews your credit.
Once approved, you’ll discuss term options with the provider. A good provider will try to align the term of the financing to meet the lifecycle of the equipment so that you get the most out of it before updating to a new piece of hardware at the end of the term. Term lengths can vary but are typically around 36 months. If you have other requests, check with the hardware subscription provider to see if they can accommodate your needs.
Once approved for financing, you and the provider will agree on the subscription structure, including monthly payments and APR. After all of the terms are agreed upon, you’re ready to roll.
Rolling Out Your New Hardware
If you haven’t already, now’s the time to prep your team. Explain to them why you chose to go with a hardware subscription service and what the direct benefits are in their workdays. Give training sessions and/or materials so that they can start right away if the technology is a departure from what they’re used to. Do what you can upfront to minimize any downtime from introducing new technology to the team.
A good hardware subscription provider will be an asset during rollout. For example, River Capital typically will offer quarterly takedowns to accommodate the rollout process. This means you can acquire technology and services as you need it while accruing costs on a single lease schedule (quarterly), and you only pay for what you receive when you receive it.
Approaching the End of Your Term
Once your subscription term is up, there are a few different things you can do. A good service provider will offer you flexible options so that you can do what works best for your company. Typically, you’ll be able to return the equipment without further obligation, extend the term to what suits your timeline, or purchase the equipment at fair market value.
Most often, companies opt to return the equipment and step into the next generation of products. Not only will you get new, updated technology, but this is a seamless process because you will already have the operating expense in your budget and the provider can keep the payment the same as you upgrade to new hardware. New tech, same cost = win-win.
Experience the River Capital Difference
As you’re considering hardware subscription services, we at River Capital Finance are here to answer your questions. We specialize in business hardware financing and have a vast knowledge of the industry. We have tailored our financing structure to give you ultimate flexibility so you’re using the right equipment at the right time, giving you the ability to optimize the technology to best suit your needs.
Our knowledge of the equipment and the network of companies that we work with on a daily basis in this industry gives us the ability to offer the most aggressive pricing due to the fact we understand the residuals and are able to pass those savings onto you. Fill out the form below for more information.