Photocopier leasing has been around as long as photocopiers have been available. There has been a number of variations of photocopier finance, some not particularly desirable of fair to the customer (many would state that some early copier agreements were just there to plain rip off the customers). There were of course straightforward honest photocopier lease contracts but there were also agreements that had seemingly endless terms and hugely excessive penalty charges for operating outside of the agreed terms. Since regulation was introduced into business equipment leasing the vast majority of leases for photocopiers are straightforward clear contracts with fair terms. Here are some Photocopier leasing FAQ’s:
Why do organisations lease photocopiers?
Leasing a photocopier or multifunctional printer has many benefits to purchasing outright, for a start the impact on cash can be considerable especially on some of the high volume photocopier printers which can run into many thousand pounds. By leasing a photocopier you are able to benefit from an affordable quarterly rental instead of the large cash outlay.
Tax benefits of leasing photocopiers and MFP’s (Multifunctional printers)
When your company leases photocopiers of MFP’s the rentals are considered an ongoing business expense and are 100% tax deductible, this means that every penny that you pay for your photocopier leases can be offset againt the profits your company makes. Leasing photocopiers is therefore a great way to have both set budgeted payments and also the tax benefits you get with leasing.
How are Photocopier leases calculated?
When you are considering a new photocopier or multifunctional copier, printer, scanner you will be offered leasing facilities by the photocopier supplier. They will calculate the quarterly rental of the new photocopier lease by taking the capital value of the device and multiplying the amount by a lease rate that has been quoted them by the leasing company, this will then determine the amount that your new photocopier will cost per quarter over the term of the lease.
How long are the leases for photocopiers and multifunctional printers?
Typically you will be quoted lease rates for 36 months (3 years) and 60 months (5 years), a 5 year lease on your new device will be considerably less than the 3 year lease. These are just the standard terms for leasing a new photocopier or multifunctional printer (MFP).
If I decide to lease a photocopier will it ever be mine to own?
There are several types of finance packages for photocopiers, if you take a lease rental agreement then the copier will never be yours as the tax breaks that you get from leasing your photocopier would not be there if you had title to the lease at the end of the term. If it was important to you to own the copier at the end of the agreement you may wish to look at an HP agreement instead of a photocopier lease rental agreement.
Why would I pay cash for a new photocopier instead of leasing?
Whilst there are many benefits of leasing your new photocopier or multifunctional printer there are some reasons you may prefer to buy instead.
If you are cash rich then you may prefer to buy instead of lease, with returns on cash at their lowest in years you may well wish to save on the interest charges that you would attract with a photocopier lease and just make that purchase instead, it may be that your company is yet to make a profit or only makes small profits in which case the tax benefits of photocopier leasing may not be that attractive.
Who are the companies that offer leasing for photocopiers?
There are a great many finance houses that offer leasing for copiers and multifunctional devices as well as brokers. Here are a few of the better known finance companies that provide business equipment leasing to companies:
CF Leasing, BNP Paribar and Siemens. These companies are long established in the photocopier leasing world and have great reputations. In addition to standalone leasing companies there are of course the manufacturers of multifunctional printers and photocopiers that offer their own ‘in house’ finance.
Canon and Xerox are two of the really big hitters in the printer copier scanner marketplace and they have their own finance companies for copier leasing and rental.
Is there a difference between copier leasing and copier rental?
The simple answer is yes, so far we have talked about photocopier leasing which is where the photocopier dealer or supplier makes a 3rd party arrangement with their preferred copier leasing company to buy the device form the supplier and then lease to the end user customer over the term of the photocopier lease. Sometimes the photocopier dealer may offer a rental agreement to it’s customer whereby the customer is not taking a loan for the purchase of the equipment but simply making rental payments for an agreed term. Often, copier rentals are offered on refurbished or second hand copiers.
How do I decide whether to lease or buy my next photocopier?
This will depend your specific circumstances and may not always be a simple decision. Weigh up the pros and cons and ask your accountant about the different tax and financial implications of buying versus leasing your next photocopier.
If I lease a photocopier do I get more protection in the event I buy a bad photocopier or have terrible after sales service?
Generally speaking the level of after sales service that you receive will be determined by the quality of the photocopier supplier that you have chosen so please do your homework before diving in. Most of the copier suppliers out there have a similar story to tell i.e. best service, best price etc but there are differences so check out customer testimonials (especially long term ones) amongst the other normal checks before choosing your photocopier supplier. If you do have a bad experience with the copier or multifunctional printer then you do have a slightly better chance of having the problem resolved if you have leased your photocopier as sometimes the copier leasing company will step in to try to help rectify the issue if you make a complaint directly to them.
If I lease my photocopier does it include the servicing of my machine?
No, not normally. Whether I buy or lease my copier the service contact will sit outside of the finance arrangement and will cater for the general maintenance and upkeep of the copier. Try to negotiate a service agreement where you are not agreeing to a fixed number of copies or prints made on your copier as this can be to your disadvantage should your usage levels fluctuate. The only times that the lease does incorporate service is in ‘copyplan’ arrangements where a number of copies are included with the photocopier lease, also, managed print service plans for multifunctional printers and copiers do merge the financial leasing of the copier with the service maintenance agreement.
What is the difference between photocopier leasing and a managed print service?
When you take out a lease on your copier you are doing just that, it is a financial contract that is normally a set number of fixed quarterly lease rental payments and nothing more. A managed print service is a little more complicated as it combines your service arrangements and the finance arrangements in one agreement . There can be many benefits of a managed print service offering but be aware that just by the added complexity it may have it’s own issues that you don’t get with straightforward copier lease agreements. With a managed print service plan you typically will agree to a number of prints or copies over the term of the agreement, this can be fine but be aware that any significant changes in your usage levels can mean that you need to re negotiate the deal with your supplier and unscrupulous suppliers ( and there are some out there) may use this change of usage to take advantage and you may end up paying considerably more for your copier supply and service than you may have done under a photocopier lease rental agreement with a separate service contract.
Will I automatically be accepted for leasing a photocopier?
Not necessarily, leasing a photocopier or multifunctional printer is very much like any loan or finance arrangement, you still need to apply for the lease and whether you will be accepted or not will be down to all the normal factors for finance approval. If you have a good trading record and have no adverse financial history then you will be likely to be accepted for a photocopier lease agreement. There are some brokers that deal with more difficult applications where there may be adverse history or it may be a new start up, these brokers will search multiple leasing companies and apply to the photocopier leasing companies that tend to deal with these types of deals. Brokers that provide this service are really good for the industry but as you would expect their leasing rates are higher than the mainstream leasing companies offer end users that have a good credit score.