Financing Technology During Tough Times.
It’s really tough out there at the moment. The cost-of-living crisis is hitting nearly everybody from small households to major companies and, indeed, Jamie’s post a few weeks ago highlighted the issues faced in terms of power costs at our Data Centres.
But for businesses the principle remains the same – if you want to get ahead then access to the latest technology is critical to maintaining competitive advantage.
But how can you/your business afford to invest when you are being squeezed during these difficult times?
Well, the answer is financing. Rather than having to pay upfront for servers, desktops, mobile devices, software or even cloud-based solutions, Fusion (in conjunction with its finance alliance partners) can spread the cost of that investment over the useful life of the assets.
And many companies can unlock significant tax savings by using finance, whilst all get to retain capital which can be better deployed elsewhere – particularly in the current economic climate.
Strategically, financing your technology can also significantly change how you think about its use.
Imagine bundling all your technology costs (hardware, software, support and services) into one low, fixed amount each month and in return benefiting from the very latest equipment and solutions, both now and in the future. Whilst at the same time feeling totally secure in the knowledge that lifecycle and redundancy of your technology will never be an issue for you again. You can focus on the BENEFITS of the solution rather than the cost.
But can’t I only finance physical tangible assets?
There is a perception that finance can only be offered on physical tangible assets. But this is SIMPLY NOT the case.
Typically, Fusion (in conjunction with its finance alliance partners) can include all the incurred project costs in the facilities that we secure for you.
- Professional Services and Consultancy – charges can be wrapped into all your project costs completely funding your entire expenditure
- Labour and Delivery – charges can be included in your facility to remove ‘loose ends’
- Software and Licensing – whether you are renewing, upgrading, or growing your software estate or deploying an entirely new solution there are financing options available.
We can fund a wide range of software solutions including:
- Microsoft Licenses – OVS, CALS, SQL, Office, Dynamics
- Adobe Creative Cloud
- Security Software – for example, Sophos
- Design & manufacturing software – for example, AutoCAD and SolidWorks
- Clinical research
- Bespoke applications
Sounds good, what other benefits can financing offer?
For private sector organisations, leasing provides a highly attractive, fully 100% tax deductible solution. Those that are subject to higher tax rates have even more to save. In particular, finance could be a powerful tool for our Law Firm clients who are Partnerships in the legal sector and will be paying a minimum of 40% tax on profits.
Locking capital away in deprecating assets is no longer necessary. You can free up the cash to be deployed elsewhere, working harder for your organisation and delivering true returns.
Costs Match Return
Leasing allows you to match your costs in line with the return on your investment, unlike capital where all costs are paid upfront and in full.
Make Budgets Work
Make investment decisions based on your needs and not limited by constrained budgets, which might otherwise restrict what you can achieve. This allows you to focus on the VALUE a solution can provide rather than the cost.
Your payments are manageable, low and fixed for the duration of the agreement, so no hidden surprises or exposure should interest rates rise in the future.
Strategically, leasing provides you with a mechanism to manage the lifecycle of your technology assets, across your whole estate, avoiding large, unexpected capital investments.
Spread the VAT
Rather than pay the VAT in full upfront as you would with traditional capital expenditure, the VAT is paid on each repayment (excluding Hire/Lease Purchase agreements).
Tell me more about these tax advantages
So, naturally the idea of spreading the cost of your project in line with the useful life of the assets sounds great, but how do the tax savings work?
Firstly, it is worth pointing out that tax savings are only relevant to organisations subject to paying tax on their profits. Therefore, for public sector organisations and other who don’t, the main benefits are typically all-around making budgets work.
True, there are some tax savings associated with using capital (mainly through the tax relief afforded by capital allowances) but typically these are modest compared to the 100% tax relief (on both the capital and interest) available through leasing.
Have you got an IT project you simply cannot get off the ground due to capital expenditure issues?
Give Fusion a call on 0333 2414123 or email [email protected] to see how we can assist.