How Hardware Leasing For SMB’s Could Strengthen Recovery Plans

Upgrade your clients’ critical infrastructure with cost-effective options like hardware leasing for SMB’s

We are in the midst of troubled times for most, if not all, of your clients. Amid the COVID-19 outbreak and the various levels of quarantines, most organizations are either closed or are seeing a significant drop in revenue and cash flow, and those issues may linger for weeks, months, or longer. Even clients that appear to be thriving during the pandemic, such as grocery stores and delivery companies, could be experiencing a variety of issues relating to staffing, worker and customer safety, and personal health. The hard reality is that bad things are happening, and we may not see a resolution to this situation for quite some time.

On the positive side, the severe financial impact that many businesses are anticipating, including MSPs and their clients, could be somewhat softened by government (local, state, and federal) stimulus programs. Combined with a vendor and supplier incentive programs, it might motivate some organizations to invest in automation and other technologies, especially those that boost efficiency or create new service opportunities.

No one knows at this stage what will happen in the coming months. However, forward-thinking MSPs are going back to what they do best: creating proactive plans for a number of business-case situations. Those strategies will vary by industry and financial circumstances, as well as by technology gaps uncovered during the current crisis, including failures in their business continuity preparedness.

Take time to reflect and organize

While many MSPs continue to set up remote office applications for clients and complete other projects, most expect things to slow down for a while before improving and eventually begin returning to a level of normalcy. The period in between is a great time to assess the status of clients and solidify your sales and marketing business once business (and life) routines resume.

Tech upgrades are sure to be top of mind for many organizations. After quickly implementing backup and remote workforce plans, many MSPs are noting deficiencies in their clients’ systems and infrastructure that they would like to address after the health crisis lifts.

There will be question marks around timing and funding. When can these projects be safely scheduled? Will equipment and materials be available at that time? And will your clients be in a sound financial position to make those investments (including the cost of your labor)?

The former plan depends heavily on direction from government officials. While IT services companies are listed among the essential businesses able to operate freely (or with minimal restrictions) by virtually every municipal and state government, as outlined by the U.S. Cybersecurity and Infrastructure Security Agency, some if not most upgrades will be able to wait until the COVID-19 risks abate. Now, however, is the perfect time to begin planning those projects.

Hardware leasing options to the rescue

The funding side of the upgrade and replacement discussion may be trickier. Your clients’ financial situation may ebb and flow during the crisis, though Federal stimulus programs and incentive-laden lending packages should ease cash flow concerns for many businesses. Even organizations that appear to have consistent or improved cash flow through the duration of the outbreak may be somewhat reluctant to spend capital in the short-term.

Hardware leasing is an excellent solution in times like these. Manufacturers are sure to offer significant discounts, special financing, and other incentives to spur computer and other tech sales, and MSPs can take advantage of those promotions without requiring their clients to invest precious capital. A Hardware as a Service (HaaS) lease or financing option allows you to upgrade customers’ systems during a buyer’s market and better prepare them for other potential business interruptions in the future.

With purchasing cycles interrupted, those organizations may have other replacement needs as well. MSPs can work up multiple proposals to get their clients back on schedule, as well as make necessary improvements, with HaaS equipment leasing and other financing options available to address more conservative budget projections.

Offering leasing options on new hardware is a great way to get your clients back on track and give your MSP an edge over competitors who don’t provide those types of alternatives. HaaS is also a safe investment for the SMB since many of the latest devices last three to five years or more without requiring replacement.

Hardware leasing lessens the risks for MSPs

The problem with traditional hardware procurement and equipment leasing programs is that instead of your customer fronting the cash for IT infrastructure improvements, MSPs have to cover the cost upfront. Chances are you won’t have that much capital, credit to spare after life returns to some normalcy. If your clients require equipment upgrades, you’ll be searching for leases and other financing options, or tapping into your firm’s cash reserves.

If MSPs purchase or lease equipment on behalf of their clients and add the cost to the next month’s invoices, the financial risk falls on providers. That financing scenario puts you in an uncomfortable position if the customer struggles after making it through the pandemic (a real possibility) and ends up closing without paying off that hardware ‒ as well as any other services you provided for that project.

Working with a large provider to cover the upfront equipment procurement costs is the safest option when it comes to maintaining a healthy cash flow for you and your clients. There is no need to get money upfront or directly secure leases and other types of financing. Automation allows MSPs to easily track information from manufacturers and financial partners, including payment status and monthly invoices.

Leasing through a large hardware provider minimizes your exposure and can simplify collections. For example, HaaS allows MSPs to procure the equipment their clients need and pass on the payments in their monthly invoices. With ConnectBooster’s integration with GreatAmerica Financial Services, technology financing, providers can easily track payments to the finance company and automatically collect on those invoices. That helps you stay on top of A/R without the typical monthly collections headaches, and no MSP needs those hassles after dealing with the COVID-19 pandemic.

Craft a hardware leasing strategy

Now is the time to lay out a recovery strategy for your clients as well as your own business. Assess the current health and systems needs across your managed IT environment and develop an upgrade strategy, including financing options, to put into effect when all businesses resume normal operations.

Consider hardware leasing as an option for projects that may require substantial capital investments or for addressing smaller improvements for distressed or cost-sensitive clients. Pay close attention to the systems they need to operate after a disaster and long-term outage, or another pandemic.

Now is the perfect time to be proactive. Leverage the tools available from manufacturers and other suppliers, including HaaS and other equipment financing and leasing options, to better prepare your clients for what comes next. If you want to ensure your business accurately tracks payments from leasing hardware, see ConnectBooster in action.


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See all the ways your business can start saving time and money every single time you collect a client’s payment.