National Neon is proud to provide its customers with the option to lease signage. Unlike the majority of signage companies we carry our own financial paper, and are therefore committed to our service and maintenance obligations.
The Basics: Leasing vs. Purchase
Leasing a sign means forging a long-term working relationship between you and your sign company (that’s us!). We can help you strike that delicate balance between what you need and what will best suit your projected cashflow. Needs can change over time and writing up a lease proposal which is both comprehensive and flexible can spell the difference between making a sign an asset or a liability.
Purchasing a sign outright will naturally entail a more significant initial investment on your part. Notwithstanding the fact that larger, more permanent appliances/fixtures lock you in on a particular style and look, your investment does not end there as other concerns such as maintenance and upgrade need to be addressed periodically. This is where National Neon shines in comparison to other suppliers. Along with your purchase, we offer options for insurance and maintenance, as well as options to lease out or resell what we have already built. This removes the stigma of looking at your signage investment as a ‘sunk cost’.
A company should ask itself if the capital needed to purchase signage could be better invested in other areas of the company that would yield a better return. By leasing signage you are effectively freeing up capital that would otherwise be tied up in a depreciating asset.
Don’t worry you’re covered! Under our Lease we carry full insurance coverage ($2,000,000 PL & PD) to protect our customers from any unforeseen events that might be a result of damage caused by signage.
Typically, used signage has very little, if any trade-in value. In fact signage is generally ignored when valuing a company’s assets. When a business trades hands, the signage is greatly discounted due to the fact that it offers no measurable bottom line benefit. As the seller of the business, your investment in signage would be a sunk cost. Our leases can be assumed by the purchaser and the lease payments can be easily budgeted for in their financial forecasts.
Service & Maintenance
Often, companies do not consider the cost of maintaining and servicing their signage. By leasing you avoid unexpected financial surprises. Your lease payments include planned maintenance and service work to ensure your sign will be well cared for.
A company often changes its image (logo, colours, slogan) over the course of time. As signage is the first form of image communication it too must be changed. If the signage was originally purchased, a change usually means new signage and another substantial capital investment, with very little to zero recovery of cost on the original signage. A lease provides customers with the flexibility to consider changing their image without the implications of the high cost and original sunk capital. After the term of the lease is up (typically 5 years) the customer has the option to renew the lease and keep the same signage or start a new lease with new signage.
Most reputable sign companies place a warranty on their products good for a period of one year from the date of purchase. When leasing a sign, the term of the warranty coincides with the term of lease (generally 60 months or 5 years). With National Neon, the maintenance is covered in our rent. So think of it as a free extended warranty! Just a tip: Always exercise caution when it comes to other companies as some leases do not cover maintenance, separating the rent obligation from the service provider.
When purchased, signage requires a high up front investment of capital with a slow write-off as a depreciated asset. After 5 years a company would have depreciated their signage only 60%. By leasing you take advantage of a full tax write-off, as the monthly payments are 100% allowable as a marketing expense.