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Before you go ahead and pay for your new technology outright, consider the following:
- Laying out an up-front lump sum locks in your capital and reduces your ability to implement upgrades or enhancements later on. This can limit flexibility and competitiveness in fast-changing market conditions
- Large cash outlays can limit the company’s other plans for long-term investments
- Technology depreciates quickly as newer equipment is introduced. More companies are already leasing office equipment such as desktop and laptop computers to ensure they’re not stuck with older equipment. As the pace of phone equipment continues to accelerate, the same thinking should apply here, too
By paying cash, you sink your capital into a depreciating asset. Leasing, on the other hand, frees your capital for other things which can drive the growth and competitiveness of your business.
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