Why buy your IT when you can rent it?
CCL article - Finance Director

The bigger a company grows, the more important cash flow becomes. Banks and other lines of credit need to be maintained, and so, increasingly, corporations are turning to Rental Exchange® for their hardware and software. Suki Gallagher, Managing Director of Corporate Computer Lease (CCL) plc, explains why.

"The IT industry in general is relatively immature in finance terms. If we look at the automotive industry, the way people buy cars has changed enormously. Once the only option was cash. Now you can obtain vehicles by using contract hire, lease-purchase, interest free credit and whole myriad of other schemes, which bring the costs more in line with individual resources and priorities," Gallagher explained.

"This approach is finally beginning to filter into the IT industry. From a business perspective, using working capital to fund an IT solution is not a good business practice; in fact it can be suicidal. Cash is the life blood of any business and through the use of Rental Exchange®, which enables you to achieve better cash management, improved tax efficiency and increased return on investment."

A faster return without tying up capital...

So how does Rental Exchange® work - and what are the benefits?

"Rental Exchange® allows you to spread the costs of IT from a three to five year period through structured payment schemes, which guarantees a much faster return," states Gallagher. "Purchasing IT with cash often means it can be eighteen months before you see any pay back."

...Or existing lines of credit

"Rental Exchange® also opens up an alternative line of credit. In today's nervous economic climate, banks are becoming more cautious in their lending policies. If a company does get bank funding, they might not want to tie up this line of credit, as it could be a restrictive and an onerous arrangement. This is in addition to being a fixed term, fixed rate arrangement, as opposed to being at the mercy of fluctuations in Libor. Yet another reason why more companies now opt for Rental Exchange®."

Not just for hardware

Unlike many other IT finance companies, CCL provides finance for all types of IT - including software. Gallagher defines why this is so important.

"Rental is particularly useful for the procurement of software and services. Applications with a high ticket price can be hard to obtain. The sums involved mean that budget approval can be very lengthy. But Rental Exchange® as a monthly repayment makes software easier to buy."

"A bank or traditional financier may refuse finance for software as they see it as an intangible item with no resale value. The customer then assumes their only option is to pay cash - but this just isn't the case. At CCL, we can provide a Rental Exchange® agreement for the total solution, without impacting on a company's cash flow. Indeed, many Finance Directors are surprised when they realise we can sort out finance for the whole project, including the services, training and maintenance."

Easy upgrades without penalty

"We also offer businesses the ability to upgrade or expand their systems at any time without necessarily increasing their repayments, through our unique Rental Exchange® mechanism. This means our customers can then keep pace with new technology - again without impacting on their cash flow." Gallagher confirmed.

So just how popular is IT Rental?

"Despite all the benefits, Europe is lagging behind the US, where Rental for the acquisition of IT is very big business. However, in a recent survey of European Finance Directors, it has been discovered that, 82% say they will be considering lease finance as a way of acquiring their IT by the end of 2002. In the next five years, we will see exponential growth in this area." Stated Gallagher.

About CCL

Over the last eight years, CCL has enabled thousands of companies to acquire the technology they needed to make their businesses more successful. As a Dun & Bradstreet 'Hot 100' company, they are one of the fastest growing companies in the UK. CCL is a leading independent technology financier, funding in excess of £350 million of IT since it's inception. This has been achieved through the development of strategic relationships with global IT vendors.