There is no doubt that technology investment demands on businesses are increasing. Hardware is critical for your team to do their jobs well, and if it fails or you are in a rapid recruitment phase, it can be difficult to keep up with the requirements of your growing team, let alone budget for it.
For high growth businesses, technology financing can be a great way to spread significant up front hardware or software costs over time. If your business is in a growth phase, you need to free up your cash flow as much as possible, rather than sinking it into tech for a team you’re yet to hire.
For businesses that need to keep a tight rein on their budget, technology financing can provide a planned way to purchase up to date technology and upgrade older equipment at a fixed monthly fee. It can also be helpful to manage your technology budget as an Operating Expense, rather than a Capital Expense, so that your accounts team don’t need to manage depreciation and interest schedules.
If your team places high value on always using the latest technology (both hardware and software), it might be integral to your business operations that you can upgrade your equipment and platforms regularly. Technology financing can be another way to ensure this happens in a managed, cost effective way.
The benefits of technology rental
There are a number of reasons a business will consider renting their hardware rather than purchasing outright. Let’s take a look at some of the key business drivers and employee driven reasons.
1. Free up your cash flow
Cash flow is important for all businesses, so if sinking it into technology purchases can be avoided, many businesses opt for a fixed monthly fee option instead.
Cash can be better redirected to revenue generating activities – increasing your production capability, hiring more staff or investing in sales and marketing. Cash flow is particularly important for businesses in an early growth or high growth phase, or businesses experiencing a slowdown. If technology spend can be planned for and reduced over a longer period of time, this can really help businesses get through a tough period or meet their growth ambitions.
2. Reduce administration costs
Managing an asset and maintenance register of technology can be a time consuming task. Whether it is an office manager needing to ensure equipment is fit for purpose, or an IT team managing technology maintenance issues, having a third party to take on this responsibility can free up your internal team for more productive tasks. It can also remove the end of life burden of needing to sell or recycle outdated equipment.
Managing assets is also a drain on your accounts team as they need to keep track of depreciation and interest schedules, and fluctuations in budget if new equipment is suddenly required. Renting assets provides fixed monthly payments for a fixed term at a fixed interest rate.
Your technology rentals won’t be impacted by increasing market interest rates which enables better budgeting and financial control.
3. Modern technology for modern workplaces
Your rented technology equipment will always be relevant and fit for purpose. Putting up with legacy equipment is a common problem for businesses and their employees – some roles require technology with better capability: more RAM, storage or higher processor speeds.
Instead of keeping your laptops and PCs beyond their useful life, renting enables you to upgrade regularly, as agreed with your technology finance partner.
Renting your hardware also allows you to trial new or untested technology that may give your business an edge on your competitors. Spreading the cost over a period of time, enables you to reduce the risk of this investment, especially if the outcomes don’t play out as you expect.
4. Flexibility in your technology requirements
If you need to scale up quickly, or upgrade your technology sooner than expected, a technology finance plan can enable this at no additional cost to your business. Unexpected growth, or a business needing to upgrade to maintain their competitiveness are important to enable, rather than cash flow being the reason to restrict business growth.
5. Fixed monthly costs
Predictable monthly payments are positive for all business owners and accounts teams. Noone likes unexpected bills, so understanding the fixed, monthly cost to support the technology function of your business and enable your team to do their best work, is money well spent.
6. Improving business performance
Your rented technology equipment will usually deliver return on investment (ROI) before you have paid the entire investment cost. If you’re investing in technology to onboard additional staff or improve efficiency and productivity for your team, you’ll experience increased revenue and deliver ROI even faster.
Why choose Connect NZ as your finance technology partner?
Connect Capital Finance offers our customers flexible funding packages to suit the varied needs of many businesses. Whether you’re a government department needing to upgrade equipment in a regular, managed cycle or a recently funded startup that needs to staff up quickly, we have technology finance options to cater for all scenarios. We can even match funding cycles to asset life cycles if needed.
Our customers love our end to end service. We have a Customer Success Management team dedicated to initial delivery of equipment and any questions you have throughout our relationship with you. We can provide monthly reports, user guides and detailed product updates. Essentially, we’ll ensure your employees are well supported with their technology needs and your IT and Accounts teams have the information they need to support roll out and payments.
We believe that technology finance will drive growth in your business by giving your team a competitive edge, and minimise the risk to your business of owning a large volume of assets that can become obsolete in a short space of time.
Learn more about Connect Capital Finance
If you’re looking for a reliable financial partner for your technology needs, find out how Connect Capital Finance can help you manage this efficiently for your business.