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Financing Business Software Investments For Better Cash Flow
Software business financing for your investments into applications also comes with often a significant expense. Not only the cost of those solutions but the maintenance and support and updates around those products bring additional cost . The good news? Software can be leased and financed through the right
software finance company
.
The reality is that many of the same similarities business owners recognize around equipment lease and finance come with the same benefits when you finance applications . The key? Using the right firm , as many firms are unfamiliar , and therefore risk averse to financing this business asset - an ' intangible'.
The irony. Simply that contrary to popular opinion software as an asset often has more value than a depreciating asset . Naturally your business doesn't ' own' the applications you are financing and the financing is simply a mechanism to pay for your investment.
Other key points ? The right to use the software comes with no right to the intellectual property surrounding the developers rights in the code. A good example - Microsoft's Excel package. We use these spreadsheets at home or in the office but Microsoft of course owns it.
In past times lenders struggled with how to collateralize and register security around the financing of the software- but that is now easily handled as lenders register a simply ' PPSA ' under the Personal Property Security Act .
The heart of our financing issue here is the true value of the software to your business. You run your business on it - ie sales management programs, office software, manufacturing software, etc. Lease payments are made since these assets are indispensable to the value and ongoing concern of the business. Unless companies are liquidated in total bankruptcy most lessors and finance firms recover fully on their software leasing - Source - Journal of Equipment Leasing
Also key to the software financing issue is that many software firms offer maintenance, support, and updates around their product. This enhances the lenders asset as it is used for longer lengths of time, and often constantly upgraded. Quite frankly it becomes less obsolete than computer hardware!
Many software lessors and lenders also finance the service and maintenance contracts associated with their customer’s software acquisition.
In summary, software lease financing is available and should be considered by every business owner in the same context as a capital equipment finance transaction. The computer hardware industry has grown with leasing, and the software industry is doing that also. The same considerations an owner gives to lease vs. buy apply to a software finance acquisition.
Speak to a trusted, credible and experienced Canadian business financing advisor with a track record who will help you ensure your software acquisitions can be adequately financed under the best rates, terms and structures that make sense for your company.
7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Click Here For 7 PARK AVENUE FINANCIAL website !
Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.
Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.
Stan Prokop
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