Conventional financing is hard to come by these days because of the credit crisis, and that's not just for consumer loans. Businesses are finding it hard to borrow money for capital expenditures as well. As a result, some VARs are finding it necessary to explore other options, and offer leasing options to their customers. A recent report talks with some VARs that started offering leasing as an option, with good results.
Deals that depend on the customer getting approved for conventional financing, sometimes for hundreds of thousands of dollars, are getting put off, either because of budgetary restrictions, or just because of lack of credit. But leasing options are putting those deals back on the table.
Leasing isn't always a good idea, but it can be a great alternative, depending on the situation. In the consumer realm, it's almost always a bad idea. When my wife and I were looking at new cars earlier this year, we looked at lease options--and considering that it required substantial money down, had mileage restrictions, and then at the end of the lease term we would have nothing to show for it, the lease was really a lousy idea. In fact, I can't imagine why any consumer would lease a car. But in the business realm, it's a different story, especially when you're talking about launching an IT project that's going to have a bottom-line impact on your operations. If the project will have a benefit to the organization, and the capital is lacking, the lease lets that project get underway right away rather than waiting. And during these times of tight budgets and difficult credit, VARs that want to keep getting the deals need to look at providing this option.