FROM $200 REBATES on Verizon (VZ) high-speed Internet connections to 44% off Hewlett-Packard (HPQ) printers, tech outfits are offering deep discounts in order to lure in small businesses this holiday season. The problem is cash-strapped businesses just aren't biting.

Spending on hardware among tech distributors that supply equipment to small businesses fell 8% in October compared to a year earlier, according to the Port Washington, N.Y., market researcher, NPD Group. In November, those declines accelerated, reaching double-digit percentage losses.

“Until economic conditions improve, business owners are going to make do with what they have,” says Karl Werner, vice president of commercial technology at NPD Group.

Cutting back on a business's tech budget, however, is often a mistake, says Robert Caplan, a Foster City, Calif., accountant. Investing in new technology can help nurture innovative ideas and business practices, as well as offer a range of efficiencies, he says.

The good news for businesses that want to stay ahead of the curve is that, in addition to slashing prices, tech companies are offering all sorts of financing deals. Here are three worth considering.

Capital Leases

When you can’t afford to pay in cash upfront, then consider a capital lease. With these leases, business owners put little or nothing down and agree to make fixed monthly payments, often with interest. At the end of the lease agreement, the owner pays a previously agreed upon amount to purchase the item.

Panasonic’s “Lease Purchase” program, for example, lets small-business customers purchase a minimum of $3,000 in equipment with nothing down. The best part, however, is that once the lease ends, the business owner only pays up to 20% of the loan amount to purchase the item. CDW, an information technology provider, offers a lease-to-purchase program that requires business owners to pay just $1 to buy the product at the end of the lease term.

Another bonus for buying an item under a capital lease: You can take a Section 179 tax deduction, says Caplan. Business owners can take out capital leases and make other qualified purchases of up to $800,000 and write off up to $250,000 for 2008's tax bill.

Operating Leases

While a capital lease requires the business owner to purchase the product at the end of the lease term, operating leases don't. Operating leases, or "true leases," are similar to renting, says Julie Welch, a financial planner and accountant in Kansas City, Mo.

Since the business owner doesn't really own the equipment or product they can't take a 179 deduction. However, they can deduct monthly lease payments, which are usually lower than capital lease payments. Additionally, repairs, upgrades and maintenance may be included in the operating lease price. At the end of the lease term, business owners can renew their existing lease, begin a new lease with upgraded technology or return equipment according to their lease terms.

Dell (DELL) allows business owners to select either capital or operating leases. For example, at the end of its “Fair Market Value” lease program, which can last for 12 to 48 months, customers can upgrade and return old equipment to Dell, extend their lease term, or purchase the equipment for the then-fair market value.

Subscription-Based Pricing

Buying the latest software is a constant battle for business owners, especially considering that upgrades and new glitches pop up all of the time. One way to stay on top of the ever-changing technology is to pay for “Software-as-a-Service,” or “on-demand” software applications such as Intuit’s (INTU) Quicken Online, SAP’s SAP CRM or Salesforce.com’s (CRM) AppExchange. These services (often abbreviated as SaaS), allow users to run the latest applications over the Internet, rather than downloading and managing them on their desktops. Typically, subscriptions are per user. So, if you have 10 employees using a product, that costs $15 each a month, that's $1,800 a year. That may seem pretty steep. However, business owners pay even larger upfront costs when purchasing a software license — and that's not even including what they'll have to pay to manage and update the software going forward.

Similar to the SaaS per-user pricing model, Microsoft (MSFT) is now offering software via a subscription program called “Open Value Subscription.” Rather than paying a one-time licensing fee per desktop, which for Microsoft Office 2007 for small businesses costs $449.95, owners can purchase a subscription to the software on a per-user basis, which is around $179 per user per year. Bryce Ungerott, vice president of operations for Xcelerate Media, a customized e-learning software provider in Dublin, Ohio, recently took advantage of Microsoft’s new subscription model. “We were able to get everyone using the same software without paying out all the upfront costs,” says Ungerott. “Being a small company, it’s nice to have that financial flexibility.”

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("Starting Up," a weekly column written by Diana Ransom for smSmallBiz.com, follows entrepreneurs through the early stages of launching a business. Write to her at dransom@smartmoney.com.)