Despite billions of dollars in taxpayer bailout bucks, banks still seem to have trouble freeing up cash for businesses. This is forcing financial managers to look elsewhere for cash.

One place managers can look is the existing investment in IT, the same investment they have complained about for years. Data centers today are packed with systems that represent hard dollar assets. According to International Data Corp. (IDC), Framingham, MA, IT represents one-third of all capital expenditures for commercial and governmental organizations. That is an attractive piece of change.

The problem is getting to the cash. The business still needs the applications and data that reside on that hardware. It may be an asset, but not a terribly liquid one. Compounding the challenge is the way IT hardware investments are regarded. They typically revolve around a standard amortization schedule of three, five, even seven years for IT hardware investment. Changing that may require an act of God.

Leasing promises a solution. IDC reports as much as 70 percent of enterprise-class server and storage was leased in 2006. Companies turn to leasing in the first place to avoid sinking hard dollars into IT hardware assets.

For organizations facing a cash crunch, a different kind of leasing is required, called a sale-leaseback. Here the organization sells an existing IT asset — one it probably paid a lot of cash for not too long ago — to a lease broker for immediate cash and leases it right back. The leasing broker, such as HP Financial Services, IBM Global Financing, or Dell Financial Services, will cut you a check but also expect to be first in line when it comes time to refresh the technology.

The benefit of the sale-leaseback is that the company gets to extract immediate cash value from the asset while it continues to use the IT systems with no operational change and no disruption to IT operations or the business. There are no systems to remove or install and no data to migrate. Applications continue to hum along as they always have. The only difference: You now have an unexpected chunk of change to play with and, of course, a monthly lease payment to make.

Other sale-leaseback benefits include:

• Establishes an ongoing IT refresh cycle that someone else takes the lead in managing

• Gets you out of the business of owning depreciating IT assets

• Ends the worry/hassle of dealing with IT assets as they age

There also may be cash flow and possibly tax advantages. Still, sale-leaseback isn’t for everybody. To begin with, the leasing companies aren’t interested in seas of aging desktop computers. This applies mainly to big data centers (or multiple data centers) with costly IT assets, preferably racks stuffed with the latest high-end blade servers or enterprise servers with mountains of storage. Most mainframes are leased from the start, so sale-leaseback won’t apply there.

Ideally, sale-leaseback should be part of a more comprehensive plan for dealing with IT assets. That plan, suggests IDC, should combine owning, leasing, and renting IT assets based on constantly changing business factors around the use of IT, advances in technology, and regulatory, tax, and accounting factors. The goal is to acquire the right amount of IT capability at the lowest possible total cost.

As for sale-leaseback, think of it as a way to get cash out of a depreciating IT asset. It sure beats going to a bank today. ###