Where can a school get funding for equipment?
Schools need equipment, yet schools have small budgets! Therefore, paying large amounts of money upfront is not always an option for school business managers and head teachers. This causes a real problem as technology and equipment seem to progress and improve at a rapid rate. Schools want to provide the best learning environments for children, so it all brings about a bit of a predicament.
This post gives a brief introduction into leasing for schools and highlights:
- Problems a school can fix by purchasing new equipment
- Leasing options available to a school
- Advantages and disadvantages of a school leasing
- Which type of leasing agreement can a school enter into
Energy efficiency and carbon reductions in schools.
It is not just businesses that need to be environmentally friendly. Schools are constantly on the look out for new ways to increase their sustainability and reduce their carbon footprint. Many tips are offered from institutions such as the Carbon Trust. But, some of the measures still need an initial purchase of equipment before savings can be made. The fact is, the savings will greatly help school budgets in the future. We have highlighted (infographic) that a typical school can save over £4000 a year and significantly reduce their carbon production switching from paper towels to energy efficient hand dryers.
Did you know schools can lease equipment?
Are schools allowed to lease? Yes and no. It all depends on the type of lease that a state school sets up. The Department for Education states that it is illegal for a state school to enter a lease agreement which is classed as a finance lease unless they have prior permission from the Secretary of State. The agreement has to be in the form of an operating lease.
Finance lease V operating lease
The differences have been highlighted in this article here by Inner Vision. One of the main distinguishing factors a school needs to be aware of are:
The risks and rewards associated to ownership of the equipment remain with the school
The risks and rewards associated to ownership of the equipment remain with the leasing company
Remember, a school needs to make sure that any lease they are entering into is an operating lease and not a finance lease.
What are the advantages and disadvantages of a school leasing products and equipment?
The Department for Education highlights the advantages and disadvantages of schools using a leasing option. These include
- No upfront costs so budgets can be maximised over the year
- It opens the door to higher spec items that may have previously been out of reach
- Future budgets can easily be forecast due to fixed payment terms excluding any change in inflation and interest rates over the payment period
- Cashflow can be predicted as the monthly rental payments will be fixed over a set period.
- It could work out more expensive in the long run to rent over a period of time than pay upfront
- You may still need to come up with capital to pay a deposit, this would be dependent upon the agreement
- There may be a minimum period and penalties if you want to terminate the contract early
- You will not own the equipment or products.
For more information about leasing services for school equipment please see here
There are leasing options out there for schools. Not just for classroom equipment, but also to help with things like washroom refurbishment, security fencing, flooring or windows.
What a school needs to do is weigh up the advantages and disadvantages of leasing to make sure it is the best way for them to go.
They also need to pick a leasing company that sets out clearly the terms of the lease to make sure it is not a finance lease. A school has to take up a renting option that is part of an operating lease. Make sure you have asked this question of the provider before entering into any agreement.
If you need any advice on how to pick the perfect hand dryer for your school please click here or if you need any further advice on anything you have read in this post please call us.