YOUR COMPANY IS LOOKING FOR TECHNOLOGY AND SOFTWARE
FINANCE SOLUTIONS!
BUSINESS SOFTWARE FINANCING / LEASING SOFTWARE
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Business software leasing and technology financing in general often seem like ' uncharted territory' when it comes to Canadian business financing. The truth is there are some striking differences in tech finance, and, as our lawyer would say ' on the other hand' there are quite a number of similarities. Let's dig in.
CAN YOU LEASE SOFTWARE? YES, SOFTWARE CAN BE FINANCED !
Yes, you can lease software as a financing solution! Don't think that because the software is an ' intangible asset ' that it can't be financed. One study by top experts revealed that over 1/3 of business owners have never considered this method of financing technology. The reality is that Canadian business owners, from small businesses to our largest corporations have been financing software and tech assets for 20-30 years. While the lease and financing documents and lease terms are essentially the same it's important to understand certain elements that are specifically related to the tech world.
USING AND LICENSING SOFTWARE - UNDERSTANDING THE BASICS
Part of the confusion around leasing or financing software revolves around the simple fact that you're licensing, or using software, your firm doesn't own it per se. Given that most computer hardware is really a commodity these days the actual value of application software is much more significant.
From the lessor's point of view they disclaim the warranty in the software and hardware they finance, that’s between you and your vendor.
CAPITAL LEASES ARE THE TYPICAL SOLUTION FOR FINANCING SOFTWARE
And the bare facts are simply that as long as you are making payments under your lease you have the right to use the software in a nonexclusive manner. Most software lease financing in Canada is done under capital, or ' lease to own' document.
INTELLECTUAL PROPERTY
We can get really technical and also offer up the fact that when you are financing/leasing software you don't own the IP (Intellectual property) around the software in question - you can use it, but you can't resell it! Today Canadian lessors also register their interest in the same manner that they register any lease document.
SOFTWARE IS A KEY ASSET IN TODAY'S BUSINESS WORLD!
We've already said that a strong case can be made for software being more valuable than hardware, as in most cases it's running your business and providing you with a competitive edge. These days it runs a company financials, manages customers, controls inventories, etc. That's why it makes sense to consider leasing/financing this valuable asset to your business.
ALL APPLICATION SOFTWARE CAN BE FINANCED
For credit-worthy companies all software can be financed, so that is all the way from MS Word to aircraft scheduling systems. It's a fundamental concept of lease financing that you should match the cash outflow of purchase with the benefits. Since the useful life of the software will often be several years it makes sense to consider a 2-5 year lease term for tech financing scenarios from a leasing company.
Custom software, in general, cannot be leased or financed, except when there is investment-grade credit quality backing up the transaction. But in Canada the lease finance industry has embraced software financing, so whether your financial need is 5k or 5 Million $ consider such a strategy. And if by chance you're a software company you should definitely consider offering customized financing to your client base. Financing software needs conserves working capital and your existing credit lines and other borrowing facilities, with monthly payments tailored to your firm's cash flow needs.
FINANCING IN THE KNOWLEDGE ECONOMY
It's no secret that more and more every day we're living in a knowledge economy, so don’t forget the financing opportunities your firm has in financing hardware, software and other services to achieve your competitive position in your industry. Software investment is pretty well key in every business today so a financing solution is extremely beneficial.
By the way, hardware and other add ons can be included in your software lease, further making the case that your firm is eliminating an obstacle to innovation! Financing technology is part of the solution.
CONCLUSION
Seek out and speak to a trusted, credible and experienced Canadian business financing with a track record of success in tech financing. The bottom line, these days it's' mission-critical’ to your business needs.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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