Thursday, November 20, 2008

Leasing Technology

Is Leasing a Viable Option?

Back in the last recession after the “dot com” bust, leasing enjoyed some popularity for a while. Until recently, it has been fairly dormant. In the last several weeks, however, I have been getting calls from leasing companies that want to push their services.

The concept behind leasing is familiar from automobiles, but works a little differently for law firms. A leasing company typically “leases” the entire cost of hardware, software AND CONSULTING SERVICES for a period ranging from 24 to 48 months. At the end of that time, you have a buyout that ranges from 1% to Fair Market Value (although what the “fair market value” is of 3 year old consulting services is something of a mystery to me). Depending on the terms, you may or may not get a tax writeoff (check with your accountant – generally a 1% buyout may not count).

In return for what amounts to a 10-20% premium compared with the cost of purchasing up front, you get a fixed low monthly payment over the period of the lease, and of course the premium is also spread over the length of the lease. This can provide firms with a way of continuing to move forward even during a recession.

Click here to see the original article by John Heckman on his Does It Compute? blog.


Please be sure to visit www.hardinglaw.com, the website for the law firm of Harding & Associates, for more information on California family law.

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