Acquiring test and measurement equipment in today’s global marketplace of rapidly evolving technologies presents engineers with a three-fold quandary: how to obtain affordable, fast and continuous access to the most advanced test equipment, how to avoid tying up capital funds in equipment that will be obsolete within two to three years, and how to avoid maintaining and disposing of unused equipment.
To help engineers, test-equipment management companies now provide an entire spectrum of acquisition programs, ranging from customized renting and leasing options to buy-back and sales of pre-owned test and measurement equipment.
Renting
Renting is the best way to acquire test equipment that is expensive and needed immediately for short-term projects, emergencies or intermittent testing. The customer can specify the exact product, utilize the equipment cost-effectively, then return it after the project is completed. In addition, renting provides protection against obsolescence and the risks and costs of ownership.
Here are ideal situations for renting:
Contract or scheduled projects.
Equipment failures.
Equipment for remote, dispersed or mobile crews.
Unplanned or urgent projects.
Back-to-back testing of different systems.
While new equipment is on order.
Try before you buy.
While equipment is away for scheduled maintenance.
Training.
The financial advantages of renting include:
Protecting budget and cash flow.
Preserving working capital.
Billing-through or expensing fees to clients.
Accruing buy-out credits (rent-to-own).
Avoiding the expenses of owning equipment, such as maintenance, repair, calibration, storage, depreciation or disposal.
Leasing
When needs are long-term, leasing provides a more flexible alternative. With leasing, monthly payments are kept as low as possible, with convenient term and upgrade options. Leasing is a cost-effective option when you need to:
Manage cash flow more effectively.
Simplify bookkeeping with off-balance-sheet financing.
Preserve bank lines of credit.
Protect cash reserves.
Control equipment and maintenance costs.
Manage changing equipment needs.
Avoid product obsolescence.
Leasing also provides several other distinct benefits:
Tax Benefits: Lease payments can generally be deducted as a business expense as opposed to dealing with depreciation schedules or alternative minimum tax problems.
Tracking: Lease payments can be closely matched to revenue produced by the equipment.
Flexibility: Leasing terms can be tailored to fit each customer’s budget and can be modified if equipment or business needs change. Typical options include upgrade or trade-in, buy-out, and maintenance and calibration.
Pre-Owned Equipment
Purchasing pre-owned test equipment is an excellent way to acquire late-model, brand-name equipment at low prices. The key is finding a reputable source/company that sells a wide range of quality equipment, has maintained it well, and provides warranties. It is also beneficial if the company can provide overnight delivery and accepts major credit cards or institutional purchase orders.
Buy-Back Programs
For excess or underutilized test and measurement equipment, buy-back programs are a win-win solution for project mangers. They provide a cost-effective solution for the disposal of surplus equipment while supplying extra capital for upgrading instruments currently in use, for purchasing new equipment with the latest technology, or for use as a credit toward renting and leasing. These programs also can provide an audit trail and the opportunity for higher investment recovery.
Recently, GE Capital Test Equipment Management Services assisted Xerox Corp. in clearing out an entire inventory of unused and surplus equipment. Xerox submitted 300 to 400 pieces of equipment for buy-back, ranging from scopes to power supplies.
With the help of GE’s buy-back specialist, Xerox realized the best value for the equipment and reduced the risk and cost of ownership. Specifically, the dollar amount of the returned equipment was credited to services already contracted.
In addition to credits applied to renting and leasing, many of today’s test equipment management companies buy back pre-owned equipment for cash. Remarketing equipment also alleviates the risks and headaches of disposing of unwanted test equipment; eliminates the added costs and hazards of idle equipment–storage, damage, repair, calibration, maintenance and depreciation; and frees up storage space for new test equipment.
Total Asset Management Services
Now, more than ever, test-equipment management companies provide leading-edge acquisition programs for the greatest utilization of assets. From renting and leasing options to the sales and buy-back of pre-owned and surplus equipment, test-equipment management companies provide a cost-effective and flexible way to acquire equipment with maximum return on the dollar and maximum gain for the bottom line.
About the Authors
Robert Kozuch has served as the Director of Marketing and Business Development for GE Capital Test Equipment Management Services for six years. Before joining the company, he was affiliated with NCR Retail Systems, Owens-Corning Fiberglass and Duke Power Co. Mr. Kozuch has a B.S. degree in mechanical engineering from Pennsylvania State University and a master’s degree in industrial administration from Carnegie-Mellon University.
Vinod Nazareth is Manager of International Sales and Remarketing at GE Capital. He has held several positions with the company, including marketing manager of industrial services and national accounts manager. Mr. Nazareth graduated from Fairleigh Dickenson University with a B.S. degree in electrical engineering and from Temple University with an M.B.A. degree.
GE Capital Test Equipment Management Services, 6875 Jimmy Carter Blvd., Suite 3200, Norcross, GA 30071, (800) GE-RENTS.
Instrumentation
Copyright 1995 Nelson Publishing Inc.
September 1995