Why Should Schools Lease?

Why should schools lease?
Schools will lease for a number of reasons. The main two are to update equipment regularly and to assist with cash flow. For example, yearly budgets may not be sufficient to purchase equipment outright.

What options can you offer my School?
We currently deal with 2 enquiries and as Apple iPad specialist, they mainly revolve around two scenarios.

The first is where the school pays for the lease and they are looking to equip a mobile classroom.  A typical example would be us supplying 30 or so Apple iPads, complete with a syncing trolley, a Mac Mini to configure the iPads plus a GEEX specialist to train your ICT technician. This is then put on a operating lease with a 3 year warranty and insurance for around £375 + vat per month for the package.

The second is where schools can provide iPads for all utilising a parental contribution.  We offer an iPad for Student scheme, which is cost neutral to the school, light on administration but allows you to put a brand new iPad Air in a student’s hand for only £13 a month.

Is it more than buying?
NO. An operating lease offers better value and a cheaper repayment by up to 20% than purchasing directly from a supplier.

What sort of lease should I have?
There are now some very clear guidelines on this. You may be offered two types of leases, GEEX only offer a legally compliant Operating Lease. As part of this the school rents the equipment and has no ownership rights at the end. DfE guidelines state:

“An Operating Lease is the only type of lease a School should enter into. These leases involve the School paying a rental fee for the hire of an asset for a period of time, and similar to a rental agreement. No other types of lease, such as a Finance lease or Hire purchase, may be entered into by the School as this is a form of borrowing” (Buy Goods Service section of Departments website).

However some lease companies and other computer suppliers may offer you a finance lease. These are illegal for a school to commit to, the current DfE guideline states:

“All LA-maintained schools are expressly forbidden from entering into any form of Finance Lease without approval of the Secretary of State for Education. This constitutes borrowing and is prohibited under section 3.9 of the LA Scheme for Financing Schools (June 2009).” (Leicester Country Council)

“Finance leases are borrowing, which is therefore illegal unless the Secretary of State has given written permission.” (Hertfordshire County Council)

What if I drop it?
We include insurance in our leases covering against accidental damage, loss or theft. In these instances we may require an explanation and picture but a machine is normally repaired or replaced within 48 hours. Please check your quote to ensure insurance is included.

What happens at the end of the agreement?
Your school has the option to either return the equipment at the end of the lease term or if you are still using the equipment you can opt to extend the rental period by up to 12 months at a reduced rental cost. Remember under DfE guides you are in an Operating leases which acts as a pure rental not a loan.

On the 1:1 Parental Contribution Scheme the school can take ownership of the iPad. The School will make a payment on their behalf, at fair market value, and transfer ownership to them.

Key Benefits

1. Offer better value for money than Local Government funding rates or other borrowings, as less than 90% of the equipment cost is financed
2. Match lease term to use of the equipment, i.e. no long-term loans to pay for equipment used over the short term
3. Allow the user to create leasing profiles matched to budgets i.e. annual, quarterly, monthly or by term
4. Comply, where applicable, with Local Education Authority guidelines on lease tests
5. Encourage the discipline of keeping a modern ICT infrastructure to ensure your school keeps pace with continuing technological advancements
6. Aid Schools in acquiring the ICT they need as opposed to ICT they can afford
7. Maintains your devolved formula capital as the monthly payments can be treated

For more information about leasing for your school, give our schools specialist, James, a call at GEEX on 0121 285 0098 or email, james@GEEX.co.uk