 The question of finance for phones is a common dilemma for any organisation which requires a high standard of service for their existing and potential customer base in the most efficient and cost effective manner. Technology changes on a rapid basis with upgrades required constantly to ensure a business remains competitive. Keeping pace with the latest technology can take up valuable resources and may distract a company from its core services. In addition, many organisations have difficulty in maintaining the necessary level of technology to cater for their own growth. In all of these situations, the right finance for phones can ease business challenges by allowing someone else to take the burden of ensuring business phone technology is kept up-to-date but keeps costs to a minimum.
Finance for phones is most commonly raised through suppliers or producers of IT equipment, bank loans or through specialist finance companies. Since phone technology is a critical yet costly aspect of running a small business, financing allows you to obtain the phones your business needs at an affordable cost.
The key benefits are:
Capital Conservation - Financing allows you to obtain the technology your business needs while retaining your cash and conserving your lines of credit.
Increased Purchasing Power - Financing enables you to obtain state of the art phones and equipment through regular monthly payments. While the upgrades your business needs may cost hundreds of pounds, monthly payments will often only increase by a few pounds.
Technology Rotation – Many suppliers will facilitate programmes which allow you to make the transition to newer equipment sooner and establish a cost-effective way to acquire, manage and retire systems.
Finance for phones makes good commercial sense; all companies need new technology to improve their efficiency and a financing option makes this all the more affordable.
The options:
Finance can be raised through one of the following:
Loan – Available from a bank, specialist finance company or direct from a supplier. Various rates and options are available so it is sensible to shop around for the best deal. Finance is normally taken over three or five year terms and paid quarterly by Direct Debit. Rentals are generally fixed for the duration of the agreement and are tax allowable.
Lease – Businesses are able to lease the equipment they need immediately without having to pay entire costs upfront. Leasing payments are regular and have the option for upgrade as technology becomes obsolete. Leasing is a financial contract between your company and a leasing company. You will be committed to repay a given number of fixed rentals for the term of the contract, (for example 36 monthly payments of £50+vat). The supplier provides the equipment to you and is paid by the leasing company. The goods are owned by the leasing company at all times until the end of the lease when you will often have the option to buy the equipment outright. Because you are essentially renting and not buying the equipment you can claim 100% tax allowance on the payment.
Credit – This allows a business a certain number of days or months before payment becomes due. Useful for companies who do not wish to use up all their cash-flow at once.
Choosing the Right Type of Finance
All types of financing offer different advantages and it is essential that you assess your own circumstances and requirements before committing to a specific finance contract. For example, if you
• want to own the equipment straight away, an outright purchase (cash or loan/overdraft) might be appropriate;
• may want to own the asset at some point in time and want to take advantage of instalment payments, hire purchase might be the best option;
• do not want to own the asset at all but require it for a period of time, consider a financial lease
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