Staying on the cutting edge of technology without breaking the bank
When thinking about the pace of technology, we are often drawn to cloud based software or unbelievable advances in mobile devices, but for mid-sized and large companies some of the most impressive technology advances can be found in your mission critical commercial equipment. With CAPEX budgets always under some pressure, how can your company stay on the cutting edge of technology without breaking the bank?
The importance of life cycle management
Technology advantages born from newer equipment usage offer great efficiencies and even increased revenues for your company. But to keep the pace, the first course of action is to develop a plan. For each asset class, determine the optimal life cycle based on your company’s usage of the asset. From there, develop a plan to acquire, finance, manage and dispose of each asset class. Make sure the plan is a collaboration of cross functional areas of your organization and perhaps most importantly, engage outside experts. Talk to companies with deep knowledge of the new equipment, secondary market values, finance strategies that maximize each budget dollar and end of life disposition strategies. Finally ensure each asset class plan is well documented and subject to annual review by the team.
Leasing, Rental and all things finance
With technology moving faster and life cycle plans in place, now it’s time to think about how to allocate capital. While there is an abundance of financial engineering offered by banks, the questions for your company are far simpler. Why would we really tie long term capital to depreciating assets? Can we find better return on capital than CAPEX?
Pay for what you use.
If the asset is depreciating rapidly, you want to avoid messy end of life situations with disposal and maintenance and you’d prefer to stay on the cutting edge of the equipment technology…just pay for what you use. A competitive rental structure for shorter term needs or lease for longer tern needs could be the financial backbone that powers your life cycle management plan in each asset class. Simple monthly payments in a defined life cycle that reduce maintenance expenses, downtime and increases your ability to have newer technology without the heavy capital outlay of ownership.
Not all leasing is the same. Equipment expertise matters
A good leasing provider should be able to help you with short term needs, long term enterprise wide assets, be flexible with location management and even extend your strategy beyond borders to your international operations. This partner should realize that competitive financing is only part of the solution because their deep experience making markets in the assets you count on drives a big part of the strategy.
At Somerset, our equipment knowledge drives better, more flexible financial solutions for our customers and a more intelligent approach to equipment finance. Staying on the cutting edge of technology across the variety of your asset needs is about more than money. It goes beyond finance. Let’s talk.