![Page 1: Buying vs. Leasing and Outsourcing Technology](https://reader035.vdocuments.mx/reader035/viewer/2022062809/56815720550346895dc4bdc9/html5/thumbnails/1.jpg)
Buying vs. Leasing and
Outsourcing TechnologyJanuary 19, 2007
Downers Grove, IL
![Page 2: Buying vs. Leasing and Outsourcing Technology](https://reader035.vdocuments.mx/reader035/viewer/2022062809/56815720550346895dc4bdc9/html5/thumbnails/2.jpg)
Leasing vs. Buying
Service Associate Member of Illinois ASBO
![Page 3: Buying vs. Leasing and Outsourcing Technology](https://reader035.vdocuments.mx/reader035/viewer/2022062809/56815720550346895dc4bdc9/html5/thumbnails/3.jpg)
Overview
Introduction
Leasing Basics
Leasing Benefits
Leasing Programs
Leasing Partners
Leasing Process
Success Stories
When to Lease & When to Buy
![Page 4: Buying vs. Leasing and Outsourcing Technology](https://reader035.vdocuments.mx/reader035/viewer/2022062809/56815720550346895dc4bdc9/html5/thumbnails/4.jpg)
Introduction of Leasing Presenters
Jason Marquardt
Director of Sales
American Capital
(630) 512 - 0066 x118
John Vonder
V.P. of Business Development
MMF Leasing
(630) 389-9921
![Page 5: Buying vs. Leasing and Outsourcing Technology](https://reader035.vdocuments.mx/reader035/viewer/2022062809/56815720550346895dc4bdc9/html5/thumbnails/5.jpg)
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.
![Page 6: Buying vs. Leasing and Outsourcing Technology](https://reader035.vdocuments.mx/reader035/viewer/2022062809/56815720550346895dc4bdc9/html5/thumbnails/6.jpg)
What can be leased?
• Computer Hardware
• Software
• Network Equipment
• Printers & Copiers
• Telephone Systems
• And Much More!
![Page 7: Buying vs. Leasing and Outsourcing Technology](https://reader035.vdocuments.mx/reader035/viewer/2022062809/56815720550346895dc4bdc9/html5/thumbnails/7.jpg)
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
![Page 8: Buying vs. Leasing and Outsourcing Technology](https://reader035.vdocuments.mx/reader035/viewer/2022062809/56815720550346895dc4bdc9/html5/thumbnails/8.jpg)
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.
![Page 9: Buying vs. Leasing and Outsourcing Technology](https://reader035.vdocuments.mx/reader035/viewer/2022062809/56815720550346895dc4bdc9/html5/thumbnails/9.jpg)
Lease Partners - Banks
• Strengths– Competitive pricing for a tax-exempt lease– Often a local trusted partner
• Weaknesses– Limited leasing expertise– Rarely participate in FMV/Refresh leases
![Page 10: Buying vs. Leasing and Outsourcing Technology](https://reader035.vdocuments.mx/reader035/viewer/2022062809/56815720550346895dc4bdc9/html5/thumbnails/10.jpg)
Lease Partners – Vendor Financing
• Strengths– Simplified process– Occasional vendor discounts to offer below
market rates
• Weaknesses– Rates are often higher– Limit a district’s flexibility on brands to lease
![Page 11: Buying vs. Leasing and Outsourcing Technology](https://reader035.vdocuments.mx/reader035/viewer/2022062809/56815720550346895dc4bdc9/html5/thumbnails/11.jpg)
Lease Partners – Independent Lessor• Strengths
– Niche expertise– Diversity in structures available to district– Flexibility to combine multiple brands– Competitive pricing
• Weaknesses– Reliance on funding partners– Unknown brokers often use unfavorable
contracts
![Page 12: Buying vs. Leasing and Outsourcing Technology](https://reader035.vdocuments.mx/reader035/viewer/2022062809/56815720550346895dc4bdc9/html5/thumbnails/12.jpg)
Leasing Process
• Obtain planning costs (equipment & lease)
• Select equipment supplier & lessor (bid?)
• Board approval
• Documentation
• Equipment ordering & delivery
• Acceptance and Lease Commencement
![Page 13: Buying vs. Leasing and Outsourcing Technology](https://reader035.vdocuments.mx/reader035/viewer/2022062809/56815720550346895dc4bdc9/html5/thumbnails/13.jpg)
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.
![Page 14: Buying vs. Leasing and Outsourcing Technology](https://reader035.vdocuments.mx/reader035/viewer/2022062809/56815720550346895dc4bdc9/html5/thumbnails/14.jpg)
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
![Page 15: Buying vs. Leasing and Outsourcing Technology](https://reader035.vdocuments.mx/reader035/viewer/2022062809/56815720550346895dc4bdc9/html5/thumbnails/15.jpg)
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 now and in the future