Download School Considerations for Entering a Lease Facility for Information

School Considerations for Entering a Lease Facility for Information and
Communication Technology (ICT) Products
The below is designed to be a useful guide to help Schools identify whether Leasing is the best
option for their School. You should speak with the equigroup who would be happy to discuss your
school’s specific requirements and help you make the right decision as well as answer any
questions you may have. equigroup provide a dedicated telephone number for Victorian schools
(03 8628 2390) or you can email them at [email protected].
Sourcing of new equipment from the Department’s preferred suppliers will provide cost saving
benefits to Schools. In conjunction with the lower purchase price for equipment, the preferred
rates available through this leasing program will reduce rental on equipment and provide a cost
effective solution for your school.
Before entering any Lease facility, the School should give consideration to the reasons the School
Council wishes to utilise lease finance.
Some principal considerations surrounding leasing of equipment should be:

There are benefits to both paying cash for equipment as well as financing equipment
through a lease. The right decision is based on each school’s specific situation and
requirements. The table below highlights some of the key differences between leasing and
paying cash.
Lease
No large cash payment - Leasing offers 100%
financing with;

No deposit;

No up-front establishment fees,

Conservation of working capital
Cash
Purchasing equipment with cash allows
schools to utilise excess capital if it is
available.
Operating Expense – Lease payments are
operating expenses.
Capital Expense – Cash purchases are
capital expenses.
Low effective interest rate – Lease rates can be
lower than the cost of capital associated with
outright purchase. The amount financed is less
than the purchase price as a residual value (value
of the equipment at the end of the contract) is
deducted from the financed amount.
The cost of capital, or opportunity cost of
committing capital to owning depreciating
assets, may be higher than the implicit
lease rate and should be factored into the
Total Cost of Ownership of the purchase.
Known Repayment – Lease payments are fixed
for the term of the lease
One off cost – equipment purchased is
then depreciated over the term of its useful
life.
Technology refresh –Schools have the ability to
refresh equipment on a regular basis. Reminders
are provided and information is available online to
ensure that technology stays up to date.
Technology refresh –Schools have the
ability to refresh equipment according to
their own timetable and to manage this with
their own systems.
Management tools - equigroup provide an industry
leading on-line management tool
(TheAssetAdvantage™) that facilitates the efficient
management and tracking of equipment. There is
an additional Enterprise version that can be
purchased which allows for enhanced
management, notifications and financial reporting.
Management tools - Schools have the
flexibility to procure and manage their
equipment using a tool of their own choice.
Additional Services
Additional Services
equigroup offer a wide range of additional services
including delivery, storage and installation for
Schools have the ability to source their own
services separately or use their own
General Leasing – Reference Guide
February 2014
technology refresh. At end of lease; collection, disk
wiping. The cost of these services can be included
in a single low rental payment. In addition, the
return of leased equipment to the previous lessor or
the resale (or environmental disposal) of old owned
equipment can be provided.

resource to manage installation and
dispose of old equipment securely in an
environmentally responsible manner.
Prior to the end of the lease term the school will be notified of its options regarding the
equipment. These options are:
1. Return the equipment – This can be organized online through equigroup’s on-line
tool. The school has the option to arrange collection and other services such as
secure disk wiping of equipment as part of the rental. If the school requires the
equipment for longer, the rental continues at a pre-agreed discount until it is
returned.
2. Extend the term of the lease – By committing to a fixed term extension for
equipment additional discounts on rental apply.
3. Purchase the equipment – If the school decides to purchase the equipment a
quotation will be provided at fair market value at the time.

Consideration should also be given to the care and maintenance of equipment. Damaged
equipment may incur penalties and result in additional costs for Schools. Fair Wear and
Tear is acceptable, however damage beyond this may incur rectification costs. A detailed
guide is available for schools by contacting equigroup. Insurance is not provided as
standard, but is available through equigroup. In addition, the optional schools package
provides a waiver for a degree of damage to avoid any unexpected costs. For more
information on the Technology Fleet Management for Schools package please contact
equigroup.

Where possible, the School should select a lease term that matches the warranty period of
the equipment or purchase an extended warranty from the supplier. This will ensure the
lease will expire at the end of equipment’s warranty period. Additional options are also
available; schools should contact equigroup to discuss specific requirements.

When adding upgrades to equipment which is leased, Schools should also lease these and
equigroup can match the term of these to the remainder of the lease term of the existing
equipment. This ensures that the upgrade and the existing equipment leases expire on the
same date.

Schools should consider paying their leases through Direct Debit. This will eliminate the
overhead of processing of invoices and payments.
General Leasing – Reference Guide
February 2014