Leasing vs. Buying
Service Associate Member of Illinois ASBO
OverviewIntroduction
Leasing Basics
Leasing Benefits
Leasing Programs
Leasing Process
Success Stories
When to Lease & When to Buy
Introduction of Leasing Presenter
Jason MarquardtDirector of SalesAmerican Capital
(630) 512 - 0066 [email protected]
What is a lease?
• By definition, a lease is a contract by which one acquires equipment for a specified period of time for a specified rent paid to the lessor.
• For Schools, a lease is a way to acquire and/or finance equipment without voter approval.
• Leasing does not constitute public debt.
What can be leased?
• Computer Hardware
• Software
• Network Equipment
• Printers & Copiers
• Telephone Systems
• And Much More!
What are the benefits?• Conservation of Capital (100% Financing)• Consistent Budget• Avoid Technology Obsolescence
– Minimizes break/fix time– Reduces user/teacher frustration
• Lowest Cost of Funds• Disposal issues eliminated• Asset Management/Tracking
What type of leaseprograms are available?
Fair Market Value
•Lowest Cost of Funds
•Flexible end of lease options
•Ideal in setting up an equipment replacement program
$1 Purchase Option
•Often a tax-exempt lease
•Fixed ownership at the end of the lease
•Ideal for infrastructure or software projects.
Leasing Process
• Obtain planning costs
• Select equipment supplier & lessor
• Board approval
• Documentation
• Equipment ordering & delivery
• Acceptance and Lease Commencement
Success Stories
• Local K-12 School District– Challenge: Technology obsolescence and
increasing technology staff costs– Solution: 3 year refresh program– Benefits: Less staff time spent on break-fix
work. Students and Teachers no longer dealing with obsolete equipment.
Success Stories
• Local K-12 School District– Challenge: Large technology acquisition
needed on a limited budget– Solution: 5 year tax-exempt lease– Benefits: Low payments spread out over 5
years and structured to keep the technology budget level
When to Lease & When to Buy
• When to Lease– Desire consistent budget– Desire to conserve capital– Desire to maintain current technology
• When to Buy– Desire to self manage technology refreshment
cycle– Excess capital available to spend