Technology Finance Solutions: Powering Canadian Business Growth | 7 Park Avenue Financial

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"The best way to predict the future is to create it." - Peter Drucker

Stop watching competitors modernize while your business falls behind – there's a better way to fund your tech evolution

7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer Technology Financing Solutions and working capital solutions  – Save time and focus on profits and business opportunities

7 Park Avenue Financial: “Canadian Business Financing with the intelligent use of experience”

Technology Finance Solutions for Funding Technology Needs in Canada

BUSINESS TECHNOLOGY FINANCING IN CANADA  

We probably couldn’t come up with the exact number. Still, wouldn’t you agree that it’s safe to say that billions of dollars are spent annually on IT (that’s information technology, by the way!) by startups and established companies around technology financing needs?

When financing the technology industry's needs, can you save thousands (or those millions?!) by innovative acquisition strategies? We’re sure you can, and we will show you how.

The acquisition of computers, IT, and other technology assets is undoubtedly one of the largest ‘Capex’ spends any medium- or large-sized business in technology business financing.

Tailored financing solutions that meet customers' unique needs can enhance customer loyalty and drive sales. You make those investments because you are optimistic about your firm’s future, coupled with the need to stay ahead of the competition in the ever-changing technology curve.

Problem-Agitate-Solution Title: "Breaking Free From Tech Investment Paralysis" Technology expenses are crippling your business growth. Every day without modern solutions puts you further behind competitors, while outdated systems drain your resources and productivity. Technology Finance Solutions provide flexible funding options that align with your cash flow, letting you upgrade essential systems without depleting working capital.

WHY FINANCE TECHNOLOGY?  

Keeping up with new technologies is one of the best ways to make your business more competitive.

When you invest in tech, you get an edge over other businesses that aren’t as technologically knowledgeable or are too small and don’t have the financial resources.

Investing in technology helps businesses meet the needs of their customers more effectively.

Technology is one of the fastest ways to drive growth, trim costs, and boost productivity. Talk to the 7 Park Avenue Financial team about technology leases and loans that can help your company optimize performance and become more profitable.

How quickly can I secure technology financing?

Approval decisions typically occur within 24-48 hours for qualified businesses.

What documentation is required for technology financing?

Standard requirements include:

• Last 6 months of bank statements
• 2 years of tax returns
• Current financial statements
• Equipment quotes

Can I finance both hardware and software? Yes, comprehensive technology financing covers:

• Hardware infrastructure
• Software licenses
• Installation costs
• Training expenses

DID YOU KNOW?  

• 78% of businesses report improved productivity after financing technology upgrades
• Average technology financing approval rates increased by 15% in 2023
• 67% of Canadian companies plan to increase technology investments
• Technology financing terms typically range from 24-60 months
• 82% of companies prefer financing over cash purchases for technology over $10,000

WHAT CAN BE FINANCED?  

Tech Financing can be used to fund your Hardware needs, such as the purchase of servers, networks, or computers. It can also finance software solutions of all sizes ( specialized ERP, CRM, HR) or boost revenue with a new website with e-commerce and social media capabilities.

Many ancillary services can also be covered via advice on IT planning and strategy and security software. Financing options can be tailored to meet the specific needs of customers.

Do you need funding to invest in infrastructure and marketing for the recurring revenue solutions you provide? Talk to 7 Park Avenue Financial about software-as-a-service (SaaS) financing solutions.

TECHNOLOGY LIFE CYCLE FINANCING  

If you are the owner, chief financial officer, or chief information officer of any firm, you want to know your alternatives in IT and Technology finance.

Those alternatives come with different costs to the business owner or financial manager, different outcomes, and different risks, all of which make it often a daunting decision when you are at the proverbial fork in the road, as well as the challenge of funding tech, needs with established financial institutions.

These alternatives can be tailored to meet customers' unique needs, enhancing flexibility in payment options and driving customer loyalty.

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 via financial services.

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 lease term, and the constant availability of upgrading during the term.

Having said all that, there are 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 your firm's lenders, as all that debt is now front and center on the balance sheet. Anyway, that’s a discussion for another day.

PRESERVING WORKING CAPITAL 

So, how are smart decisions made in technology financing, whether it’s computers, phone systems, software (yes, the software can be financed!), etc.?

It all comes down to a couple of key areas. First, if you aren’t proficient in lease calculations, work with an expert who will help you assume residuals, interest rates, and proper economic life cycles.

Preserving working capital allows businesses to serve their customers better by providing tailored financing solutions that meet their unique needs and demands.

THE OPERATING LEASE SOLUTION  

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, and you could flip into new technology in 24 months. Financial institutions such as banks do not offer operating leases.

An example is a 2 million dollar major technology finance acquisition. Using smart financing via an FMV lease, a monthly payment for our 24-month term would be approximately 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.

This operating lease solution benefits customers by providing flexible payment options that meet their unique needs, enhancing customer loyalty and driving sales.

In such cases, 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.

Uncommon Takes On  Tech Finance  

1. Using technology financing as a hedge against technological obsolescence
2. Leveraging fintech loans for Competitive Advantage in traditional industries
3. Strategic timing of technology investments based on market interest rates

KEY TAKEAWAYS  

• Understanding credit requirements drives successful applications.

• Finance programs come  with Flexible payment structures that  maximize cash flow management

• Technology lifecycle alignment ensures optimal financing terms

• Strategic timing of funding requests impacts approval rates for finance needs

• Leveraging tax benefits creates additional value opportunities in the long term

• Maintaining solid financial documentation expedites approvals

• Market rate awareness helps secure competitive terms

• Vendor relationship management enhances financing options

CONCLUSION - TECHNOLOGY EQUIPMENT FINANCING  

So, what’s smart IT and technology financing all about?

It knows the use of your equipment, its expected useful life, how lessors can play the interest and residual game and how some fundamental expert information can put you back into the driving seat on those thousands (or millions) that Canada spends on IT finance for technology.

You may not have considered IT financing options, but they are the backbone of running a successful company for most businesses.

They can range from traditional leasing solutions, as well as factoring and supply chain financing, all the way to loans for larger or high-profile firms exploring raising money via venture capital.

Financing can be a huge obstacle for any business.  Let our team structure specialized financial service solutions designed for your needs without compromising ownership or being too complicated. 

Call 7 Park Avenue Financial, a trusted, credible, and experienced  Canadian business financing advisor who can assist you with financial advice regarding the approval process in this critical area of business: technology finance services.

FAQ: FREQUENTLY ASKED QUESTIONS

What is fintech?

Financial technology is the business of specialization in developing financial services software for banks and other financial institutions, businesses, or the general public. Fintech companies help improve efficiency, reduce costs, or increase revenues by automating manual processes with computer code, enabling more efficient transactions between two parties without human intervention.

Financial Technology originates in innovation designed to make banking services more accessible via smartphones and tablets and simplify complex tasks around financial activities like existing products and services in industries and areas such as mortgage applications to be completed online rather than at bank branches where staff are available on site.

What makes Technology Finance Solutions different from traditional business loans?

• Tailored specifically for technology investments

• More flexible terms aligned with tech lifecycles

• Often includes soft costs like installation and training

• Can combine multiple technology needs into one solution

• May offer tax advantages traditional loans don't provide

How does technology financing improve cash flow management?

• Preserves working capital for core operations

• Creates predictable monthly payments

• Matches payments to expected revenue increases

• Allows for seasonal payment adjustments

• Includes maintenance and upgrade options

Will technology financing help my business stay competitive?

• Enables immediate access to current technology

• Prevents technological obsolescence

• Supports rapid scaling capabilities

• Maintains capital reserves for opportunities

• It keeps you aligned with industry standards

What types of technology can be financed?

• Hardware systems and infrastructure

• Software licenses and subscriptions

• Cloud computing solutions

• Cybersecurity systems

• Communication platforms

• Integration services

How quickly can my business implement financed technology solutions?

• Most approvals are within 24-48 hours

• Immediate access to funds upon approval

• Vendor payments are handled directly

• Quick installation scheduling

• Rapid deployment support

What minimum qualifications are needed for technology financing?

• At least 2 years in business typically required

• Credit score minimum is usually 650+

• Annual revenue requirements vary by lender

• Industry-specific criteria may apply

• Documentation needs depend on the financing amount

How does the application process work?

• Initial consultation to assess needs

• Basic business information submission

• Financial document review

• Technology solution verification

• Final approval and documentation

• Vendor payment coordination

How do payment structures align with business growth?

• Step-up payments match revenue growth

• Seasonal adjustments available

• Skip payment options for slow periods

• Balloon payment possibilities

• Early payoff options included

What security requirements exist for technology financing?

• Equipment often serves as collateral

• Personal guarantees may be required

• Blanket liens less common

• Software financing has unique requirements

• Asset-based lending options available

What ongoing support is provided during the financing term?

• Regular account reviews

• Technology upgrade opportunities

• Payment adjustment flexibility

• Vendor relationship management

• End-of-term options guidance

What is Blockchain?

Blockchain is a new way of transferring money electronically. It's more secure than any other form because it eliminates the need for third-party processors and intermediaries, such as banks or credit card companies, that would be vulnerable to hacking.