Keeping Pace with Technology
In a perfect world, technology would last forever. Too bad it’s not a perfect world.
Realistically, corporations need about three years to handle the technology lifecycle. The cycle includes identifying, sourcing and acquiring technology, time for IT pros to install it, users to use it and the accountants to depreciate it. When all is said and done, the cycle takes about three years, period.
Without major changes in the money supply, Financial Accounting Standards Board (FASB) rulings and Federal tax law, the three-year cycle is not likely to change, but technology producers move so fast now that new products come out every nine to twelve months. At the end of a standard three-year lifecycle, users may be working with fourth-generation products no longer supported by the manufacturer and certainly not capable of providing a competitive advantage, no matter what the marketplace or industry.
What’s Corporate America to Do?
The answer to this dilemma is simple. Base your planning on the standard three-year “useful life” schedule, but look for penalty-free options that let you upgrade hardware and software within that time frame. And TIP Capital has just such an option available. It’s called the Tech Refresh Option, or TRO.
TRO. Easy as 1-2-3
With a TRO lease, end-users are given a six-month window in a standard 36-month lease, during which they can opt to upgrade to the latest available technology — without penalty and without a change in monthly payments. During either the 18-24 month window or the 24-30 month window, you decide whether you’re ready to upgrade or not. Then just call TIP Capital. It’s that simple.
Lease payments are based on a three-year schedule, providing the lowest monthly costs, yet you can upgrade technology as business needs dictate. The TRO option applies to your entire lease schedule and the value of the new product acquisitions must be comparable to the equipment financed under the original lease.
TRO. Lowest Cost, Maximum Flexibility
TIP Capital’s TRO lease option reduces or eliminates the risk of obsolescence, provides you with the lowest out-of-pocket costs and provides maximum flexibility.
To learn more about TIP Capital’s Tech Refresh Option (TRO), contact Rick Pierman, Remarketing Manager at (248) 593.3917 or rpierman@tipcapital.com.