IT Business Finance . Serious Solutions For Information Technology Financing In Canada

Where Is Your Firm On The Business Technology Curve ?

OVERVIEW – Information on IT business finance in Canada . Financing information technology solutions



IT Business Finance. We're talking about ‘information technology’ financing of course. There’s a lot of concern by Canadian business owners and financial managers around the fact that if companies want to grow and stay competitive that requires a lot of capital these days. The right type of financing helps business owners cope with a technology change nightmare . Experts state that the actual risk of acquiring and owning tech assets is simply the time factor – going from valuable to ‘ economically useless’ in zero to sixty!

Many Canadian businesses view their acquisition of technology almost as a battle, and we’re quite sure they are never really figure out if they are winning or losing!

So is the solution to give up? Hardly, in fact a lot of traditional straight forward financing solutions can handle a lot of the economics and issues around IT finance. Naturally that involves computer hardware, software, services, telecom assets, and on it goes.

One of the reasons Canadian business owners and their mgmt. teams wrestle with financing tech assets revolves around their belief that these assets both operate differently than other business assets, and in some cases, i.e. software, are even intangible .

What are some of the assets that are being financed these days when it comes to equipment leases and loans? It's a wide array, including PC's, cell phones, severs, POS systems, and even all the underbelly of the internet - the guts so to speak !.. I.e. routers, switches modems, etc. One more thing - even software licenses can be financed.

One of the big fallacies out there is that software can’t be financed. It can, simple as that. We're talking predominantly application software though, not the actual development.

Medium sized and larger corporations tend to have a plan or overall strategy when it comes to IT business finance. Finance terms typically range from 2-5 years, and companies opt for the traditional capital lease or in many cases a more sophisticated version of the tech lease, the 'operating lease.’

While many lease and finance companies in Canada are prepared to finance tech assets the Canadian borrower should in no way assume that it's always based on the strength quality and need of the assets themselves. What we mean by that is simply that your firm’s actual cash flow and overall financial condition still play a key role in the overall financing approval. In fact the case could be made that many banks, lessors, and other commercial lenders in Canada, while financing technology, still feel strongly that these assets still come with a high obsolescence factor.

Sophisticated lenders and captive finance firms in the tech industry place a high reliance on 'upgrades ', especially when in the case of a captive finance firm it’s their own product.

On balance we can say that if you don’t have experience in financing tech type assets now would be a good time to get some help! The ability for you to get solid info and advice on pricing, payment structures, lease and loan options, and end of term residual issues is key to your IT business finance success.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you navigate the tech finance jungle with valuable expertise.

7 PARK AVENUE FINANCIAL
CANADIAN ' IT ' BUSINESS FINANCING EXPERTISE



Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/it-business-finance-technology-financing.html



7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com
















Stan Prokop

Are You Mastering Technology Financing ? Canadian Computer Leasing Must Know Info For PC Hardware And Other Tech Assets

Computer Finance Tips For Canadian Business .

Information on technology financing in Canada .What do Canadian business owners and mgr’s need to address for solid benefits to computer leasing and pc hardware and software financing strategies .


Looking for a huge amount of risk, financial risk, and extra cost for your Canadian business? We aren’t’ and you shouldn't be either!

Haven’t you got enough risk in your business life to have to also consider the downside of making the wrong decisions in areas of technology financing? Surely it’s a fact that computer leasing of pc hardware, servers, and software provide both the greatest benefits to your firm, as well as the greatest risk if you structure things improperly.

It's always been clear to us that there are just a huge amount of benefits to your business when your technology infrastructure is throwing your firm off the benefits you had hoped for... (and were promised?)

Another aspect of getting the right tech financing in place is simply the amount of time you and or your key staff in this area can spend on weighing options and considerations .When your finance folks, accounting folks, and those techies aren’t in mutual agreement or in the know about whats going you are leading your firm into potential mistakes and costs you could have avoided.

When we sit down with clients and layout some key issues for them to consider for computer and software leasing one of the key areas we focus on is ' end of term '. It's a simple phrase that has all sorts of ramifications you didn’t think of. And unfortunately most clients focus on starting a lease, and not ending in, which should have the same consideration when it comes to computer and tech financing.

So why is the end of the lease so important in technology financing ?Simply because that’s when a lot of your risk mitigation kicks in , and , depending on which type of and lease company you are dealing with that’s when their real profit on your transaction often starts . It’s not always about the interest rate, which many clients seem to always focus on a being the most important part of a computer leasing success story.
So whats one example of how you can lose big time in technology financing and end of term .Quite frankly you wont believe how simple, and costly this is! We're talking about 'notification '.

Most Canadian companies don’t either know or understand their notification rights when it comes to end of term. Your lessor may have promised to call you when your lease term is up... if they do, or even better, notify you in writing, that’s great. However when they don't you are in many cases obligated to keep paying for the lease.

Ever paid for something twice by mistake? (We hate it when that happens!) You wouldn’t want to do that in your personal life, and surely with the cost of pc’s, servers, and software you would regret paying for that twice also. That's a bit of an understatement, don't you think?

So discuss end of term options, ensure you understand your rights and obligations, and also diarize when that lease term is up. Never had a calendar been so important!! And by the way, by spending some time on a ' Master Lease ' allows those notifications, rights and obligations to be addressed one time, up front, in writing! That’s smart business.

In summary, we often preach to clients that one of the largest obstacles to technological innovation to your firm is the cost of pc hardware, servers, software, telecom equipt, etc. Consider eliminating that 'obstacle to innovation' by speaking to a trusted, credible and experienced Canadian financing business advisor who can ensure you have computer leasing that makes sense , in place, today!



Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing
.Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/technology_financing_computer_leasing_pc_hardware.html

Your 2nd Best Bet in Canadian Technology & Cleantech Energy Finance

Technology Finance Solutions In Information Tech and Cleantech in Canada



Technology financing as well as ' Cleantech ' Energy Leasing and Finance is a growth sector in Canadian financing and exhibits a strong need for solid financial solutions. Let's examine what you need to know in terms of key fundamentals in acquiring tech and energy assets.

If you are a client that require constant asset acquisition in areas such as computers and peripherals, electronics, IT Services, Medical Equipment... etc you need to be aware that financing decisions you make in fact can be as important as the asset your acquire . It's obvious to many business owners and financial managers in Canada that paying cash for major projects in Cleantech and technology acquisition either doesn’t make sense or in fact is simply not possible.

The hard reality is that due to different tech and cleantech asset types no one finance firm or specific solution will suit all your needs. That's why in Canada, where the financing choices are simply less available than those in the U.S. it’s important to understand who the players are in the asset category you are choosing to finance.

Projects in IT (information technology) as well as the Cleantech area tend to require huge amounts of cash and have significant tax and tax credit implications. It's strongly predicted that energy and carbon tax credits will one day in fact become financeable themselves.

The carbon tax will are levied on all fossil fuels, including gasoline, diesel, etc... and in some progressive provinces, such as British Columbia, plans are already in place to have funds collected that will in fact be ' returned ' via tax credits.

The risk in both managing and staying on top of technology assets as well as Cleantech assets is a formidable one for Canadian business.

When you enter into a financing arrangement for either IT or Cleantech assets you clearly want to understand how they will be used by your firm, and for what duration. The proper financing of these assets in fact can become a competitive strategy.

Issue you should consider in technology finance includes your ability to upgrade during the term of the financing arrangement or lease. Proper ' cost of ownership models ' in both Cleantech and tech finance can be valuable from a viewpoint of return on investment. allowing you to also consider the implication of all those related items such as software, training and support, environmental costs, etc. Very basic lease vs. purchase analysis can often help your financing decision and aid in the proper solution. It’s a simple matter of adding up all your costs and then ensuring your cash flows and cost of capital makes sense relative to the investment you are making.

Technology financing makes sense because it addressses the issue of cost, gives your flexibility, and provides rates terms and structures that make sense to your financial situation and goals.

Whats is then your first and best bet in technology financing and Cleantech finance. Quite frankly it’s simply vendor or manufacturer financing. The ability of the manufacturer or vendor to provide financing to you cannot be overstated. But on the other hand, 2nd best is often a better solution in Canada – that is .. aligning yourself with an independent unbiased financing solution allows you to escape from the ' control' that a manufacturers financing asserts.

That is why we often recommend to clients that they consider expert business financing assistance that is unbiased relative to your tech asset pricing, allowing you to eliminate many of the limitations that are placed when you align yourself with any one specific vendor. Flexibility and added expertise can save you thousands, even hundreds of thousands of dollars depending on the size of your project.

One size fits all does not work in technology financing and cleantech energy finance. Seek a customized independent financing solution that provides a comprehensive finance solution for your tech and Cleantech asset needs.



Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/technology_financing_cleantech_energy_finance.html

Technology Financing – Options and Strategies for IT And Solar Assets In Canada

Financing technology, whether it be IT ( information technology ) assets, or the new kid on the block, solar finance , requires a combination of access to capital and solid expertise . Let's examine some key options and strategies in tech finance that will provide your firm with the growth potential you need. Oh, and by the way, this pertains to whether you are a user or a vendor of these assets.

Key issues that come into play are valuation of assets, useful economic life (ouch! isn’t that an accounting term?!) and types of financing available in the Canadian marketplace.

Clearly tech financing covers a variety of industries, we're focusing today primarily on computing and solar industries, but our comments are broadly applicable to a number of other asset types.

One of the key challenges in financing technology is simply the fact that the majority of goods and services provided and utilized by your firms either depreciate rapidly, or , unfortunately slowly become obsolete. There is a great analogy that tech assets are like a mines assets, they are depleted and are ' replenished by development '. A true analogy!

Financing tech assets must take into consideration the obsolescence factor - a good example of course if pc's, laptops and servers which easily can depreciate 30% per annum. Creative financial arrangements around these types of assets is critical and we'll discuss that a bit also.

Software and services, often financeable, are other solid examples of high technology assets that require specific options and strategies. These products are high gross margin to the seller and when financed properly provide both benefits to the user and profits to the vendor/lessor. Factors that drive software financing are upgrade cycles, continued proliferation of PC'c and mobile products into all facets of business, as well as the obvious productivity gains these products provide.

Tech and Solar assets can be either finance or purchased. When these assets are financed key issues for financial and credit scrutiny include interest coverage and cash flow, valuation of the technology re type of financing desired.

In the U.S. Surprising almost half the country's employed work in IT and other emerging tech areas such as solar, wind, etc. We're quite sure Canada's numbers would be too far off that.

For computer IT assets typical lease and other financing terms rarely go over three years... it’s simply a question of the useful life of these types of assets. Solar projects require alternative strategies, since they typically have a longer payback.

Financing transactions in IT and Solar industries tend to be cash flow, and not asset based when it comes to lending and financing transactions. These type of transactions clearly aren’t ' asset based lending ' in its traditional form. Upgrades are common in computer, they aren’t in Solar.

It is important for both borrowers and vendors and lessor to separate financing from licensing and technology issues - the intellectual property in the asset being financed rarely, if ever transfers to the borrower.

Key options and strategies in technology financing typically include operating leases, providing the user with significant flexibility.

When either financing tech and solar sales, or utilizing and acquiring such assets consider working with an experienced, credible and trusted Canadian business financing advisor who should be selected on the basis of experience, knowledge, and references .


Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/technology_financing_options_strategies_solar_it.html

Save thousands (or Millions ! ) Via Smart Technology And IT Financing Via Finance Benefits

We probably couldn't come up with the exact number but wouldn’t you agree it’s safe to say that Billions of dollars are spent annually on IT (that’s information technology by the way!) and technology financing. Can you really save thousands, or those millions?! by smart acquisition strategies . We're sure you can and we will show you how.


The acquisition of computer, it, and other technology assets is without a doubt one of the largest Capex spends any medium or large sized business makes. Your make those investments because you are optimistic about the future of your firm, coupled by the need to stay ahead of the competition in the ever changing technology curve.

If your are the owner, chief financial officer, or chief information officer of any firm you want to know what your alternatives are in the areas of IT and Technology finance. Those alternatives comes with different costs, different outcomes, and different risks, all of which make it often a daunting decision when you are at the proverbial fork in the road .

The author of this article spent over 20 years in technology financing and saw trends come and go. The largest trend by far, we think, was the desire of firms to go off balance sheet when acquiring computer, technology and telecom assets. That probably is still a good decision today for many reasons - the main ones being lower monthly payments due to the residual taken by the lessors, the ability to invoke your three rights at the end of the term of the lease, as well as the constant availability of upgrading during the term.

Having said all that there are of course some new international accounting rules that will bring those off balance sheet liabilities back onto the balance sheet. Is that a good thing? We won’t weigh in on that one today... it’s probably good for lenders to your firm as all that debt is now front and center on the balance sheet. Anyway, that’s a discussion for another day.

So how are smart decisions made in technology financing - whether its computers, phone systems, software (yes software can be financed!) etc.

It all comes down to a couple key areas - first of all, if you aren’t proficient in lease calcs work with an expert who will help you assume residuals, interest rates, and proper economic life cycles . If you could afford it (some can’t... some can) the smartest thing to do would be to finance technology and IT on a 2 year FMV lease. That way the residual value established by the lessors would be high, you would be able to flip into new technology in 24 months.

Let's use a 2 million dollar major technology finance acquisition as an example - Using smart financing via an FMV lease a monthly payment on our 24 month term would be approx 71k per month.

Your firm would be the beneficiary of a 400,000 residual investment by the part on the other side of the lease. Your monthly payments to acquire 2 million dollars of technology for 24 months would be only 1.7 Million dollars. If you chose the lease to own route or loan on your technology financing your payments on a typical 36 month transaction would be over 2.2 Million dollars, almost 400k more than in our ' smart finance ' scenario.

So, what’s smart IT and technology financing all about? Its knowing the use of your equipment, its expected useful life, how lessors can play the interest and residual game and how some very basic expert information can put you back into the driving seat on those thousands (or millions) that Canada spends on IT finance for technology .Speak to a trusted, credible, and experienced expert to assist you in your benefit recapture in this critical area of business.
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Stan Prokop is founder 7 Park Avenue Financial ;

Originating financing for Canadian companies,specializing: working capital, cash flow, and asset based financing , the 6 year old firm has completed in excess of 45 Million $ of financing for companies . For info / free consultation on Canadian business financing / contact details see:

http://www.7parkavenuefinancial.com/it_financing_technology_benefits_finance.html