graphic savings group blog

Copier Leasing on a Budget

Copier leasing might be the answer for helping you manage your budget. The cost of office supplies can be a sore subject for many small business owners. While some dismiss it as just the 'cost of doing business,' the smart managers realize that frugal office management can translate into real savings that increase the bottom line. 

Leasing a copier is one way to eliminate a huge portion of your office budget and potential cost liability. The key to creating a budget is having a fixed set of costs. A copier lease allows you to set monthly payments and avoid costly per-click charges. Many copier leases also offer service alternatives to the manufacturer, allowing you to determine how and when you want your equipment serviced.You can eliminate suprises in your monthly bill by eliminating spikes in copier costs.

If you're considering a copier lease, please consider the services of the Graphic Savings Group.

Copier Leasing Structure

A copier lease can be structured in a number of ways and the key to a successful lease is arranging the contract to benefit your corporation. If you need to lease a copier, look at maintenance and the cost of supplies first. There are five major ways that a copier lease will be organized.

1. Copier Lease Payment plus the maintenance cost per copy and cost of supplies.

Here all of the costs for maintenance and supplies are in addition to the monthly or quarterly payments on your equipment.

2. All-Inclusive Equipment Lease Payment 

This is a lump sum lease, which means that all of your costs are fixed- great for budgeting.

3. Copier Lease Payment plus the maintenance cost per copy (which includes supplies)

Here, your charges are directly relevant to the number of clicks, or copies, that you make with supplies being a fixed cost.

4. Equipment Lease Payment plus a flat rate for maintenance and supplies

Here your costs are fixed, even if maintenance and supplies are additional. This is a good option for someone who is doing a large volume of copies.

5. Copier Lease Payment plus a flate rate for maintenance (which includes supplies)

Each has benefits, either in the form of controlling costs or budgeting. The key is to assess your needs based on volume. All manufacturers have tables that can give you service estimates according to usage.

If you're looking to lease a copier, please consider the Graphic Savings Group.

Copier Leasing Costs

The key to managing and understanding copier leasing costs is to break things down according to each aspect of equipment. In other words, what are the costs of the equipment? what are the costs of supplies? what are the costs of service? and what are the financing costs?

Once you have a number for each of those options, you can assess how much your digital copier is actually going to cost you per month. The key is to make sure that a copier manufacturer or equipment vendor doesn't bundle together the costs, masking the true costs of your equipment.

If you're considering a copier lease, please consider the Graphic Savings Group.

Outsourcing of Equipment Leasing

If you want to offer your customers equipment leasing today, you don't necessarily need to be the one selling them on the lease and handling all of the questions related to the interest rate and expenses associated with leasing equipment.

Your customers can apply for leasing on the Internet, by phone, or fax. They can apply with a preferred vendor established by you to offer them a 'preferred rate on equipment leasing.' A lot of equipment lessors can even create private label leasing documents which have the name and logo of your company.

You just have to decide what level of interraction you want an equipment lessor to have with your customer and vice versa. If you need advice on offering equipment leasing, please consider talking to the Graphic Savings Group. 

Cost Per Copy Lease

A cost per copy program can be structured exactly like a copier lease, or it can be more informal, working like a month-to-month rental.

Cost per copy programs, otherwise known as cost per print, are available for machines of all sizes. While there isn't a cost per copy program yet for the Xerox iGen3, there are cost per print options on the Xerox 2060 and Xerox DocuColor 12.

The key to determining whether a cost per copy lease is right for you is based on your expected output. If you're looking for a low-cost, supplies-inclusive contract, a cost per copy deal might be the right option. Often the cost of service and supplies are fixed as part of your cost per print arrangement; however, be sure and ask as you don't want to be stuck with a huge bill for toner or parts. You should also ask if there is a base charge for service or. Another question to consider is what happens to the machine at the end of the deal. Do you take ownership of the digital copier? Does it revert back to the vendor?

In the right situation, a cost per print program can be a low cost alternative to owning or leasing a digital copier. If you're considering cost per copy options, please consider talking to the Graphic Savings Group.

To Guarantor or Not To Guarantor

The question of whether to have a guarantor on an equipment lease or not is often the question for startup businesses. If you're asking yourself, should I have a guarantor on my copier lease, then read on...

Anything you can do to bolster your lease application, you should strongly consider. If you have a low credit score or are a new business, a guarantor can get your copier lease application approved. In addition, you may be able to secure a better interest rate on your equipment lease. Better lease terms mean the potential for more profit and flexibility that you might not have had if you hadn't considered a guarantor.

If you're in the position where someone from your board of directors or a private investor is willing to be a guarantor, you should always consider the option. Often, it is worth talking to an equipment lessor and explaining that a guarantor is a possibility because it may make them more comfortable with working with a startup business on an equipment lease. There's also no stigma attached to businesses that have guarantors, in fact, many leasing companies prefer it.

If you need more information on guarantors or equipment lease, please consider contacting the Graphic Savings Group.

Copier Leasing and Sarbanes Oxley

The impact of Sarbanes Oxley on copier leasing with regard to financial disclosures can be confusing. Scott Harman, a technology writer, has done a good job of outlining the basic issues in a recent article.

Please keep in mind that this article is a PR piece; however, the value lies in Harman's discussion of Sarbanes Oxley in the context of copier leasing. He notes the ways in which a lease may be closer to a sale and thus treated as such by the government. If a deal is categorized as a sale rather than a copier lease, it can reduce the potential tax benefits and force a company to recognize its assets differently.

If you're looking into copier leasing and have questions about the potential tax implications, please consider talking to the Graphic Savings Group.

The Copier Sale Leaseback

If you're asking what is the copier sale leaseback, read on and find out. The copier sale leaseback is where you sell a company your copier equipment and then have it leased back to you at a pre-determined rate for a given time period.

Let's say you have a Xerox DocuColor 6060, you might sell it to a copier lessor. Your business receives a payment for the agreed upon sales price. The digital copier is then leased back to your organization. You then have three choices when the lease expires. You can renew your copier lease, ask the lessor to take back the equipment, or utilize the purchase option.

The copier sale leaseback is valuable because it frees up cash and resources for expansion. You're no longer locked into a copier, but instead can use the cash flow to pursue new products.

If you're considering a copier sale leaseback, please consider talking to Graphic Savings Group.

Tax Benefits of Copier Leasing

If you want to look at whether the IRS is going to let you deduct the cost of a copier lease, you should know the criteria which determines whether a given transaction is an equipment lease or sale.

One of the great benefits of copier leasing is that you can often deduct the lease payments on your tax returns. Consider the following, because these are the areas that the Internal Revenue Service will look at in determining if a copier lease is actually a lease for tax purposes.

--Often a dollar out equipment lease is more likely to be considered a purchase. The nominal price of $1 at the end of a copier lease is not reflective of the equipment value.

--If the digital copier has no value at the end of the lease.

--If the equipment lease payments are stacked with high costs during an intial, short period of time followed by a relatively small lease payment for the same amount of time.

--If the lessee is required to repair and assume all risk of loss on the equipment.

These are important factors to think about when looking at a copier lease. The tax benefits of a lease can only be used if the IRS believes you have entered into an equipment lease. If you have more questions or are considering leasing a copier, please talk to the Graphic Savings Group.

Copier Leasing in Space?

Even NASA leases copiers.

So if you grew up wanting to be an astronaut and that didn't work out, there's still the possibility that your copiers could be leased by NASA. Here, you can learn more about NASA's RFP process for leasing copiers and the process they have designed to be as environmentally friendly as possible. 

With over 2,000 copiers leased, NASA has some purchasing power. Even if you're only leasing two copiers, you can still learn something from how they approach the process.

Their machines are used on a cost per copy basis, in which they only pay for the prints run on their equipment. In addition, they have demanded onsite technical support and a minimum of 95 percent up time on their copiers. These requirements are all delineated in the RFP that is sent to potential vendors.

Decide what matters to you as part of a cost per copy lease? Do you want supplies to be included in the cost of the lease? Do you want a service guarantee (the answer should always be yes)?

If you're considering a copier lease, please consider talking to the Graphic Savings Group.