School Asset Finance for IT Equipment

[soveryapt]

Good morning folks

 

First off, I hope I'm posting this in the right place, I'm never certain of the best place to post questions like this, so do feel free to relocate it to the right place if I've got it wrong.

 

One of my schools has been approached (such is the time just after budgets are out) by an asset finance house (Maxxia to be precise) which has got them thinking about possibly going down that route as the desktops are starting to age a bit and it might be a good thing to do to get everything up to spec again and offer them the chance to spread those purchases over several budgets instead of taking a hit upfront etc.

 

In the interest of good practice, I said they need to do ask questions of others who have done this and I said I'd post something on here to see if any one has experience of asset financing, how have you found it, were you locked in to buying a particular brand, are there any asset finance companies you would recommend (or conversely steer well clear of), etc, etc.

 

Thanks y'all

Andy

[theeggmaster]

Good morning folks

 

First off, I hope I'm posting this in the right place, I'm never certain of the best place to post questions like this, so do feel free to relocate it to the right place if I've got it wrong.

 

One of my schools has been approached (such is the time just after budgets are out) by an asset finance house (Maxxia to be precise) which has got them thinking about possibly going down that route as the desktops are starting to age a bit and it might be a good thing to do to get everything up to spec again and offer them the chance to spread those purchases over several budgets instead of taking a hit upfront etc.

 

In the interest of good practice, I said they need to do ask questions of others who have done this and I said I'd post something on here to see if any one has experience of asset financing, how have you found it, were you locked in to buying a particular brand, are there any asset finance companies you would recommend (or conversely steer well clear of), etc, etc.

 

Thanks y'all

Andy

 

Yes, I've spoken with Maxxia in the past and their offering sounded very good. However, our Local Authority has preferred and financially checked leasing companies, so we had to use those instead.

 

We've leased our wireless system over 3 years (which has just come to an end) and I'm currently doing a lease for 30 iMacs due to budget restrictions. I've also ran two parental contribution leasing schemes for mobile devices (iPads, Chromebooks, Android tabs).

 

The companies I've used are Investec and Syscap for the mobile devices, and Siemens for the iMacs.

[PotNoodleTech]

Leasing is a powerful tool if you don't have the budget and need to spread the costs.

 

Negatives are:

1. your paying interest of course - that is money spent that has ZERO impact on teching and learning. All interest does is make someone else richer.

2. Reduced flexibility. You've got everything on a 5 year lease, what if in year 2 or 3 you have a dramatic shift in direction, be it strategic, change of building, change of staff. You can't react on a year by year basis like you can when you buy things outright.

 

Clearly you can't run a school based on "what if's"

 

We've come out of leasing now, and gone down the road of a three year IT development plan - we buy everything outright, if we can't afford something this year it either gets prioritised over something else, or gets done next year or the year after, but that is flexible and can change in line with school development.

[soveryapt]

Leasing is a powerful tool if you don't have the budget and need to spread the costs.

 

Negatives are:

1. your paying interest of course - that is money spent that has ZERO impact on teching and learning. All interest does is make someone else richer.

2. Reduced flexibility. You've got everything on a 5 year lease, what if in year 2 or 3 you have a dramatic shift in direction, be it strategic, change of building, change of staff. You can't react on a year by year basis like you can when you buy things outright.

 

Clearly you can't run a school based on "what if's"

 

We've come out of leasing now, and gone down the road of a three year IT development plan - we buy everything outright, if we can't afford something this year it either gets prioritised over something else, or gets done next year or the year after, but that is flexible and can change in line with school development.

 

Yeah, the lack of flexibility is something I've fed back saying that they would need to make sure there was still a "what if" budget - for instance we've just replaced a drive in the servers array over half term because it was showing signs of failure, but I've also said it's a great time to assess their needs and look at what is required by different departments and do things differently in terms of making up of the budget for the IT purchases (i.e. everyone uses it so there should be an element for IT in everyones budget etc).

[psydii]

They must offer you an operating lease.

 

One of the major tests to check that you have an operating lease is that over the initial term your pay <90% of the capital cost of the equipment.

 

Fail this test and you are looking at a finance lease which would require LA/DfE/EFA approval.

 

Given the other constraints of an operating lease, over a 10 year period of consistently leasing elements your end up paying about 10-30% more as you have less leeway to sweat assets.