Leasing Services

Leasing Service

REASON TO LEASE CERTAIN TECHNOLOGY EQUIPMENT

 

In the business world when it comes to considering lease financing for equipment, there are all kinds of reasons to lease all types of equipment with a variety of lease terms, structures and end of lease specifications coupled with an assortment of  “Terms and Conditions”.

Specifically, with regard to certain types of technology equipment such as desktops, laptops and various servers, many large organizations prefer to lease much of this equipment utilizing a “True Lease Structure.”

Typically a true lease implies the lessor owns the equipment throughout the lease term and provides the lessee the right to purchase the equipment at the end of lease for its then fair market value or return the equipment to the lessor. 

 Other plans and structures are always available; however, the economics associated with each will differ depending upon the variations.

• Depreciation recaptures.  If a company is indeed refreshing certain technology assets within every 36 to 40 months of acquisition, and then disposing, by sale or other means, of the asset in some way, that firm must account for depreciation recapture on its tax books which in turn negatively effect its ROI even more. 

As you know, there is a difference between reporting and tax accounting. If a company were to lease those assets under a Revenue Procedure 75-21 lease, then they can then just treat the payments as a deductible expense for tax purposes and avoid adjustment issues.  Additionally, the lease payments in most cases can be treated off-balance sheet. 

 This is important because true leases typically don’t negatively impact debt covenants, financial ratios and balance sheet requirements necessitated by the rating agencies and market lenders.

• Technology Edge.  Companies via the use of leasing can keep their I/T department at top efficiency by instituting an organized refresh program. 

  Historically, everyone knows, if cash is used to purchase an asset, a business will use the asset long beyond its need to be replaced. In the case of technology equipment this methodology can create all types of infrastructure difficulties and platform issues.

The reason is the I/T department is using older equipment with newer operating software platforms that don’t integrate well together, or just continues to have failures in operating performance that significantly slows down efficiencies throughout the company.

• Maintenance Cost.  Extended maintenance can be purchased to help keep systems running during the first 36 months after purchase.  However, as a practical matter most firms try to self maintain after initial maintenance expires. 

 The cost of maintaining I/T equipment begins to appreciably rise after 36 months of use in a business environment. 

Without refreshing your equipment on a timely basis, your firm will begin to lose even more money on its investments in the purchase of certain technology assets through the added ongoing expense of maintaining such equipment. 

Leasing to timely refresh technology assets avoids additional cost of maintenance.

• Disposition of Assets.  Recently, Gartner Group, IDC and other research organizations have been quick to point out evolving ownership risk of technology assets. 

New privacy laws and various EPA requirements have begun subjecting businesses to liability issues when disposing of those assets.

Working with a Lessor providing these services, as part of the lease arrangement, does away with this issue.  

Although there are local firms in your neighborhood that purport to dispose and/or clean disk appropriately, most local firms are not as complete and thorough as typically required by a lessor concerned with the same risk, and who will provide certifications at DOD standards.

For more information about leasing services / ask us at info@ossfs.com 

SERVICES AND BENEFITS

OSSFS is a part of direct leasing firm (not a broker) who uses its own funding capability (equity investing) to transact business for our clients on a confidential and professional level with very competitive rates and structures. The company takes pride in stating it has serviced leases in-house from commencement to terminations, and disposals since 1988.
We use master lease arrangements and subsequent schedules to efficiently perpetuate additional lease needs as required by our clients.

Our professionals are very experienced in leasing and top level management strategies. We can actually achieve “Off-Balance Sheet” structures.

We work very closely with the CFO’s and CIO’s of large enterprises to help contain cost in disposition activities associated with technology equipment. “Asset Management” of technology equipment has become a very important, costly, and sensitive risk issue for major firms to carefully consider.Confidentiality of data with respect to new privacy laws, and the logistics and handling of the equipment disposition relative to EPA requirements have put a new emphasis on leasing equipment instead of maintaining direct ownership.
The bulk of Fortran’s portfolio of equipment on lease is mainframe computers, workstations (PCs), laptops, POS, servers, switches, KSU’s, VoIP, Video Conferencing, etc., used in the data and/or telecom world.

This specific activity allows us to stay in tune with values and technology transitioning.

Also, we sell or lease mid-size and large mainframes and servers out of our portfolio inventory to company data centers seeking specific items in the market to help them avoid paying the high cost of new units purchased direct from the manufacturers.

We will finance other types of equipment with competitive rates and structures, as well, even though we emphasize Technology Equipment as a specialty.
 For more information’s, pleaseclick here!