There are three ways a company can choose to pay for new technology, two of which most people are very familiar with. First is buying, such as paying cash or using a bank loan.
The second option is traditional financing. Both are legitimate options, however, there is a third option that is not as common, yet provides protection against the pitfalls often found in buying and financing called TAMCO Shield.
Shield works as an operating expense termed-rental agreement. Therefore, allowing the customer to use the technology while it is relevant and not be weighed down by acquiring technology that depreciates at a very rapid pace.
Every company should consider these five nuggets of information before deciding which procurement option is best for their next technology solution:
Taking out a loan or drawing against your line of credit will tap into your borrowing power, which you may need down the road for something unexpected.
You may prefer to keep your new technology off of your balance sheet. If structured properly, some programs can be classified as an operating expense (OPEX.)
Some financing programs have fully deductible monthly payments. Check with your tax advisor to learn more.
Do you feel that it is a wise decision to acquire a quickly depreciating asset as a capital expense?
Consider how spending your company's capital on equipment today could actually cost you money by not getting a return. Instead, think about investing it on an appreciating asset.
Be sure to see a side by side comparative analysis of every option. Understand the pros and cons of each procurement method and know what will work in your favor. Every company's situation is different.