Leasing vs. Buying

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Leasing vs. Buying
Service Associate Member of Illinois ASBO
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Overview

• Introduction
• Leasing Basics
• Leasing Benefits
• Leasing Programs
• Leasing Process
• Success Stories
• When to Lease When to Buy

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Introduction of Leasing Presenter

• Jason Marquardt
• Director of Sales
• American Capital
• (630) 512 - 0066 x118
• jmarquardt_at_americancapital1.com

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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.

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What can be leased?

• Computer Hardware
• Software
• Network Equipment
• Printers Copiers
• Telephone Systems
• And Much More!

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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

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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.

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Leasing Process

• Obtain planning costs
• Select equipment supplier lessor
• Board approval
• Documentation
• Equipment ordering delivery
• Acceptance and Lease Commencement

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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.

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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

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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