It’s More Challenging to Lease Hardware
At some point, your organization may begin to consider leasing hardware at an enterprise level rather than purchasing it. This may be due to capital tech refresh constraints, or you might simply want a faster and easier solution for obtaining the hardware you need. Whether it’s mobile payment processing, scanners for warehouse operations, mobile devices for fleet employees, or just office hardware such as printers, you just need a solution — and you need it soon.
However, just as with any other form of a lease (renting an apartment, leasing a vehicle, and so on), this type of method for obtaining hardware brings with it certain challenges. While it may be more appetizing for individuals to enter into leases for these more personal arrangements, leasing is more complex for businesses. For example, individuals aren’t necessarily concerned with the ROI on apartment rental, but when it comes to hardware, organizations’ finance teams pay careful attention to ROI and other financial considerations.
One of these additional considerations is the upfront capital expense. Just as with buying an asset like a home or car, a down payment is often required with a lease in order to obtain certain favorable terms or as part of the financial arrangement. While it would be cheaper initially to lease hardware, the reality is that money isn’t going to be returned to you in any way.
Other challenges with leasing hardware are more operational. For example, the lease itself will at some point end. While you may have the option to renew the lease, you’d likely have to put down another large chunk of capital. If the hardware accidentally incurred any damage or excess wear, you may be required to purchase the hardware or pay a fee. If any usage limitations have been exceeded, you may have to pay fees on those overages as well.
While leasing may seem to be the more favorable option compared to purchasing hardware, the reality is that it’s not for everyone. So what are companies that don’t have the capital for an enterprise hardware purchase supposed to do to meet their hardware needs? Rather than lease hardware, an “as-a-service” model provides the same lower upfront cost but without the many financial and operational challenges that come with leasing.
Benefits of HaaS vs. Leasing Hardware
Unlike leasing, hardware-as-a-service (HaaS) eliminates the barriers to entry for companies looking for more flexible options. Available exclusively at River Capital Finance, HaaS was developed as a lower-cost, faster-to-deploy solution for companies in virtually any industry where mobile devices and other hardware solutions are needed at an enterprise level.
Whereas a hardware lease might require a sizable down payment, especially for larger enterprise-level contracts, HaaS requires no upfront cash outlay — meaning no down payment is required. The hardware is available to you for a straightforward monthly fee that you pay throughout the contract term. This eliminates the financial barrier to entry and also provides peace of mind for finance teams in that significant capital investment is not required. And for hardware, fleet, and IT managers, ROI can be realized much sooner.
In addition to saving organizations on capital, HaaS also has a feature that most leases don’t: expandability. With HaaS, organizations sign a master agreement that governs the relationship, terms, and hardware specifics. While the master agreement covers the initial hardware being used, it can easily be appended to include additional hardware should needs change. Whether additional employees have been hired, new facilities have been opened, or your needs have simply changed since the agreement was signed, there’s no limitation to appending your agreement to get the hardware you need to operate your business.
Another consideration is service and support. With a standard hardware lease, you may not have many options when it comes to repairs or replacement. You may be required to pay for those repairs or replacements outside of your lease, or the company may provide extremely limited support for your hardware. With HaaS, full service and even repairs are included in your contract.
Once your HaaS contract is nearing its conclusion (typically around three years), you will have more options than you would by leasing hardware. For example, you can choose to extend your agreement and receive all new hardware, you can update your agreement to include additional hardware, you can explore potential buy-out options, or you can decide to go in another direction.
Modernize Your Hardware Strategy with HaaS
With so many benefits (many of which are realized far sooner than with a purchase or hardware lease), HaaS is the flexible solution that companies have been seeking for their enterprise hardware needs. Don’t lease hardware — go with HaaS and start realizing immediate ROI and numerous other benefits faster.
Contact our team to learn more about HaaS and how you can get your new hardware initiative up and running faster than ever.