Top 10 Reasons for Financing Software or Technology
July 19, 2018
One of the keys to success in business is how well you leverage your capital to support and grow your company. The decisions you make related to the acquisition of resources can be crucial. This is especially true with software and technology, as they evolve rapidly and you need to stay current to stay competitive.
So, should you purchase resources outright? Get a bank loan? Or, is there a better way?
For many companies, financing is the right choice. Why? Leasing provides a number of advantages, including that it is a financial strategy that allows you to:
- Ensure your technology is refreshed on a regular basis. Leasing makes it easy to stay current with the latest upgrades, which is important since software and technology have a much shorter lifecycle than things like equipment.
- Use your assets to generate revenue and cost savings, and expedite your ROI while you manage payments over time. In other words, when you lease technology rather than buying it, you have less capital tied up in the asset.
- Cover 100% of your equipment, software, and services with 0% down. Here again, the money that you don’t have to put down can be working for you in other ways.
- Acquire more and better equipment than you could without financing. In a purchase scenario, you may feel compelled to purchase low-end technology or less of it so you can keep more capital in reserve.
- Save cash for expansion, improvements, marketing, and R&D. Financing gives you the power to move from just “getting by” to “getting ahead.”
- Bundle your equipment, installation, and maintenance from multiple vendors into a single payment. Running a business is complex. Leasing makes it simpler.
- Choose payment terms customized to match your cash flow. For many businesses, cash flow varies seasonally or based on other factors. Leasing allows you to get on a schedule where you make payments when funds are most available.
- Select fixed lease payments to protect against rising interest rates and inflation. There is great comfort in knowing that your lease payments will remain constant no matter where interest rates go.
- Execute sale/leaseback transactions on recently acquired assets to generate needed working capital. Leasing offers tremendous flexibility as you craft your financial strategy.
The Sooner You Act, the Bigger the Benefits
Taking advantage of leasing for your software and technology acquisitions isn’t difficult or time-consuming. It just requires making the decision to move forward. And, of course, the sooner you get started, the more benefits you’ll see when you look back at your financials at the end of the year.