Often one of the key drivers for outsourcing IT services and data centre infrastructure is a desire to keep working capital in a business. Although costs over three, and certainly six years, are higher when outsourcing, the attraction of keeping “money in the bank” to help with growth or unforeseen difficulties often makes sense. However there is another option for organizations to consider.
British businesses spend £1.1 billion a year on IT Leasing and Financing, says The Finance and Leasing Association (FLA).
95% of the top FTSE 100 companies use leasing to pay for the vast majority of their equipment and software according to a leading IT Finance provider. Yet, overall we spent £12 billion on IT and communications equipment in 2011. This indicates that less than 10% of total spend on IT is currently being funded through leasing. This may change over the coming years as there are some compelling strategic and financial reasons to opt for leasing finance products.
Leasing is a route to consider, especially now that High Street Banks are failing SMEs. Last year they fell short of their Merlin Agreement lending targets by £1billion.