As a start-up or SMB owner, it can be difficult to make a large but badly needed investment in tech hardware as your network needs may be impossible to estimate. However, this doesn’t mean that you can forgo hardware completely, as running a business with underpowered hardware will cause very obvious and frustrating issues that will more than likely end up effecting the client.

A less known about option for SMBs is hardware leasing from an IT company. While it’s not the best choice for every business, it is a great option for businesses that may need to scale their capacity quickly, that don’t want to maintain and replace the hardware themselves every few years, or they may just temporarily require expensive hardware but don’t see it as reasonable to buy it outright. Being able to keep the lump sum you would’ve spent on equipment and instead paying a monthly fee to a vendor is a great advantage if the equipment leased is able to generate well over its monthly leasing fee.

What Are the Benefits of Leasing Hardware?

The most obvious benefit of leasing hardware is that you can obtain brand new equipment without paying the full amount out of pocket for it. Depending on the leasing contract and the vendor, you can continuously trade up new equipment every lease so buying new hardware every 3 – 4 years isn’t a concern. Many businesses of all sizes run their network on legacy hardware to avoid paying hefty costs for new tech, but this leads to vulnerabilities such as service disruptions, data loss, and even cyberattacks that will occur without showing any symptoms before it happens.

This also doubles as a benefit for quickly growing businesses; it’s a recipe for disaster to pay for hardware that you will soon be over its capacity for use. More than likely, even with a leasing contract, a vendor will be willing to negotiate if more capacity is needed or changes need to be made.

Another benefit of leasing hardware is that if any issues occur with the equipment, all you have to do is reach out to your vendor and they will swap the equipment out and file a warranty claim themselves. Most hardware comes with a multiple-year warranty upon purchase, however, the warranty process can be time consuming and frustrating, especially when your service is disrupted and the manufacturer doesn’t seem to be a in hurry to process your warranty claim.

If your hardware vendor is an IT company, they might even bundle the lease, the set-up, and the managed services for you to make your network work seamlessly so you can focus on your business without the worry of financing, maintaining, and actively monitoring your hardware.

When Does It Not Make Sense to Lease Hardware?

Leasing hardware only makes sense in certain circumstances, and it shouldn’t be the go-to option for every business. Sometimes leases may require advance or down payments, have inflexible terms, and have excessively long-term contracts. Vendors may also make things more complicated for your business, which can end up costing even more than the piece of hardware itself in various types of resources. The most obvious disadvantage is that you don’t own the hardware, even though you may be able to buy it after the end of your lease for fair market value, it will often be expired at that point and continued use of it creates vulnerabilities in your network. 

The best way of assessing whether renting is the right choice for your business is to use experts to help estimate where your business will be in the next 5 years, and ensuring that your choice allows you to create a stable and secure network that’s either managed by experts internally or externally to support your revenue generating operations.

Want to Talk to an Expert?

KLH has over a decade in experience in industries such as legal, finance and insurance, manufacturing, retail, construction, and more. Our expert technicians know that different industries have different needs, and tailor their managed services approach individually so business owners and managers can go back to focusing on business operations; that’s how KLH makes technology work for you. Contact us at 952-258-8200 or info@klhmn.com to learn more about how we use technology to support SMBs in the greater metro area.