The acquisition of IT equipment from an EMI may be viewed as a simple option. Rather than making a full payment at once, the company will make payments in several months, making the expensive equipment seem more affordable.

However, ease of monthly payments does not necessarily imply that it is a financially sound option.

Businesses with fluctuating projects, varying number of employees or need for regular updates to their technology would find it more convenient to lease IT equipment.

EMI Gives You Ownership, But at a Cost

In case a business acquires equipment by way of financing, it eventually becomes the owner of the asset once it makes all the required payments as per the terms of the deal.

Ownership makes sense where the equipment will constantly be put into use for several years. But then, it implies that the business will have to take care of the maintenance, repair, upgrade and eventual replacement of the equipment.

Technology depreciates very fast. The computer you buy now becomes less valuable with time as new models come up.

Through EMI, one could end up paying for equipment that is no longer useful anymore.

Renting Reduces the Upfront Financial Commitment

The most significant benefit of rental is that the business is able to get the necessary equipment without having to make a hefty purchase.

This comes in handy especially in cases where the business requires several gadgets at once. This allows them to rent the gadgets at their disposal instead of having to spend much money buying laptops or desktops.

The money saved can be used for other purposes.

Compare the Total Cost, Not Just the Monthly Payment

Comparing monthly rent with the EMI amount is often wrong.

What one should ideally do is compare total cost of ownership against total cost of renting over the period that the machine is really required.

Ownership costs may include:

• Purchase and finance costs
• Cost of repairs and maintenance
• Upgrading hardware
• Replacement costs
• Asset management
• Disposal/ Resale costs

Rental costs must also be analyzed in detail including rental period, maintenance and replacement policies etc.

Renting Works Well for Temporary Projects

Every business does not require equipment on a permanent basis.

A firm might employ some temporary workers for six months for some specific project or arrange for a training program or set up a temporary branch. Purchasing a large amount of equipment for this duration of time will end up with the firm having equipment that it doesn’t need after completion of the requirement period.

Leasing will help the firm align the duration of the equipment requirement with the project.

For instance, a firm requires 25 laptops for six months, leasing would be a better option than buying 25 devices.

Technology Changes Quickly

However, technology needs can sometimes become obsolete much quicker than anticipated.

Whereas at first, a company could use common laptops, at some point it would require high-tech devices for designing, developing, analyzing or other specific jobs.

In case the equipment belongs to the business, an upgrade involves the purchase of new devices alongside handling the old ones.

The rental approach offers more flexibility when it comes to the change of hardware requirements.

Maintenance Can Become Easier

IT equipment ownership entails the obligation to keep them running.

The hardware may malfunction, the battery could be worn out and parts may need to be replaced at some point. For organizations which own hundreds or even thousands of devices, dealing with such matters can be very time-consuming.

Most of the rental services offer maintenance or technical support services. However, different service providers have their own ways of doing things.

Organizations need to know how they will deal with malfunctioning of the equipment, how soon replacement is available and availability of technical support services.

When Buying May Be the Better Choice

It does not mean that renting is always the right choice for any firm.

Purchasing could be the more beneficial choice when there is continuous usage of the equipment in many years and when the company has enough funds to handle maintenance.

But the decision depends on the longevity, period of usage, availability of cash flows, upgrades, and the total cost of owning the machine.

When there is the need for short-term usage, then renting is better.

Choose the Model That Fits Your Business

The decision of either going for EMI financing or renting should be made based on the way your company really uses the technology.

In cases where ownership is very crucial and the technology will serve for many years, buying might make sense. But when your needs keep on changing or the technology is needed for just a short period of time, renting would lower your financial burden while at the same time providing you with the technology you need.

KPI Solutions offers IT equipment rental solutions to companies which require flexible access to laptops, desktops, MacBooks, servers, printers and other technologies. By renting the necessary technology, companies can have control over the technology that they require without having to spend too much money on hardware that they won’t need forever.