Understand the Pitfalls of a Cash Purchase vs. the Benefits of Leasing

Every customer must address how to pay for technology every single time they acquire a new solution, upgrade an old solution, or migrate to a different solution. TAMCO stresses to customers and their solution providers that addressing what to buy as well as how to buy are both critical to creating a total solution. Often, customers and solution providers discuss the acquisition of technology systems from the perspective of a cash purchase; however, that is often not an ideal payment approach for either party. TAMCO encourages end customers, value added resellers (VARs), managed service providers (MSPs), integrators, and manufacturers to consider some of the drawbacks of cash purchases described below as well as the potential benefits that can be realized when technology solutions are leased instead.

Pitfalls of a Cash Purchase:

Depreciating Asset

Phone systems and UC equipment are quickly depreciating assets and not the best use of capital.

Not the Lower Cost

For those customers who truly want to own technology equipment, a cash purchase is actually not the lowest cost method of acquisition. A dollar buyout lease will result in a lower total cost once various tax, financial, and accounting factors are taken into consideration (see further discussion in TAMCO Comparative Analysis).


If ownership of technology equipment is the goal, consider that most customers have achieved that goal already yet they are about to pay more, again, to upgrade or replace an existing solution. If customers are upgrading or replacing their current solution today, they should consider the possibility they may find themselves doing the same thing again at some point in the future.

VAR’s Lose Value & Control in the Sale

Accepting a cash purchase does not enable a VAR to add any unique value to the overall solution because all competitors will accept cash as well. A cash sale does not empower VARs to influence the sales process in their favor. A cash sale does not have mechanisms to create a meaningful bond between the customer and solution provider for future business.

Benefits of Leasing Technology Solutions

Manageable Monthly Payment

Leasing in general provides a manageable monthly payment allowing customers to avoid depleting their hard earned cash and preserve that capital for other financial needs and revenue producing investments.

Accounting Perks

Certain leases can offer financial reporting benefits and allow organizations to avoid accumulating additional depreciating assets such as technology equipment.

Lower Cost

Most lease arrangements will result in a lower cost method of payment than a cash purchase, even if customers still prefer to own the equipment at the end of the lease.

Unique Leasing Alternatives

For those customers who prefer the "use" of technology over "ownership", TAMCO offers exclusive leasing alternatives with value above and beyond traditional lease benefits including:

  • The ability to change out, upgrade, or migrate to another solution at any time during the term and have all remaining payments forgiven.
  • Act of God coverage for damage due to natural disasters.
  • Multiple end of term options to allow customers to do what is in their best interest at that point in time.
  • Specifically structured as an operating lease (OPEX) meeting accounting guidelines to be treated as an off-balance sheet item.
  • See additional materials on TAMCO Shield.
Leasing depreciating acquisitions like technology frees up cash flow to focus on more strategic revenue generating assets.

Connect with TAMCO to learn the full details of partnering on lease transactions

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