YOUR COMPANY IS LOOKING FOR INFORMATION TECHNOLOGY
BUSINESS FINANCE!
Methods Of Financing Technology
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
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 technological investment. 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.
IS YOUR COMPANY WINNING OR LOSING THE TECHNOLOGY BATTLE?
Many Canadian businesses view their acquisition of technology almost as a battle when it comes to the ' it business ', and we’re quite sure they never really figure out if they are winning or losing, staying informed, let alone understanding their financing options, including the challenge of obtaining information technology during Covid 19 to conserve cash flow and current credit facilities. The ability to harness growth potential from technology is key .
FINANCING SOLUTIONS CAN SOLVE THE TECHNOLOGY OBSOLESCENCE CONUNDRUM -
So is the solution to give up? Hardly, in fact, a lot of traditional straightforward 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 to power your e commerce applications, website, etc.
One of the reasons Canadian business owners and their management 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.
ALL TECHNOLOGY ASSETS CAN BE FINANCED - INCLUDING APPLICATION SOFTWARE
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, servers, POS systems, and even all the underbelly of the internet - the guts so to speak from all those tech companies = i.e. routers, switches modems, etc. One more thing - even software licenses can be financed.
Most startup firms are financed by owners who quickly encounter the large ' CAPEX' needs that come with ensuring your firm has up to date and competitive technology. In some cases, payment postponement can be arranged for creditworthy businesses who desire to conserve cash flow. Small and growing technology companies are constantly looking for business capital, venture capital - it's a never-ending search!
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. Areas such as supply chain financing demand numerous new tech assets.
YOUR COMPANY NEEDS A STRATEGY TO RENEW AND UPGRADE TECH ASSETS
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.’
YOUR BUSINESS CREDIT PROFILE WILL PLAY A KEY ROLE IN FINANCING APPROVAL
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. The start up firm faces strong challenges in obtaining finance solutions in any environment.
UPGRADES PLAY A KEY ROLE IN TECHNOLOGY FINANCING
Sophisticated lenders and captive finance firms in technology companies place a high reliance on 'upgrades ', especially when in the case of a captive finance firm it’s their own product.
KEY ASPECTS OF INFORMATION TECHNOLOGY FINANCING SUCCESS
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 technology innovation.
While many venture capitalist and angel investors provide equity financing the actual financing around computing and software needs is a separate challenge. The Bank Of Canada's low rate posture makes almost business financing easier.
CONCLUSION
Just staying informed on changes in technology & Fintech is of course a challenge. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you navigate the tech finance jungle and maximize working capital with financing tailored to your needs. At 7 Park Avenue Financial we prepare business plans and cash flow projections if needed. IT loans and information technology financing is around the corner!
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Stan Prokop
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