Computer servers can become a significant cash investment for most businesses.
And while many small and medium sized businesses are heading to the Cloud, there are still a significant number that want to own and maintain their own hardware, or have computer server equipment to provide services to their clients computer needs.
So instead of depleting your cash resources, you may want to consider equipment financing your computer server acquisition.
And when we say computer servers, this would include Tower Servers, Rack Servers, Blade Servers, and all the related infrastructure that can be required.
Most computer equipment financing will be via a lease financing arrangement.
This can be structured into an operating or capital lease to provide the flexibility the business requires for accounting, taxation, and cash flow purposes.
And one of the great thing about a leasing arrangement is that you can get at or near 100% financing, further conserving on your cash flow from operations.
If your server install also comes with a software component and installation costs, these items can also potentially be financed into a loan or leasing agreement.
For a computer equipment based operating lease, the term that can be provided is typically three years, but for a capital lease, the lease term can range from three to five and a half years in length.
With a capital lease, at the end of the lease term, you automatically acquire the asset for a nominal purchase amount, typically ten to twenty dollars.
One of the reasons that financing companies have increased their interest in financing computer server equipment is due to the fact that computer hardware and software is now basically required by all companies, is always changing, and is always requiring businesses to upgrade.
So for the equipment financing company, after you pay off your server financing arrangement, there is likely going to be future needs that will also require financing.
And the more computer equipment financing you acquire and pay back, the stronger your credit will be for getting additional financing in the future.
Stronger credit with one or more equipment financing companies can lead to higher approval limits and better rates.
So there are both near term and long term advantages to be financing both your computer hardware and software requirements.
For amounts under $50,000, you can get approved for financing with as little as a completed credit application, vendor invoice, business registration information, and personal net worth of a guarantor.
For larger amounts, we would also need to provide the financing company with the last completed financial statements for the applicant company.
Give us a call today to go through any computer server requirements you may have and we’ll quickly provide you with your available financing options.
Computer server financing can include computer hardware, software, installation, and training.
While a good portion of the related costs can be soft costs, or intangible assets in form and description, computer equipment financing is still available to most small and medium sized business owners and managers.
In fact the available sources for computer hardware and software financing has grown in recent years with more equipment financing companies adding this type of lending and/or leasing to their portfolios.
The reasons for this are several.
First, for amounts under $50,000, many small ticket lenders can approve financing based on credit and cash flow and do not have to be overly concerned about the resale value of the asset in the event of default.
Second, computer servers and other computer assets are essential parts of business operation today, making it one of the last things someone is not going to make their payments on.
And third, because of the ongoing changes in technology, each borrower or lessee is likely to be a repeat customer in the future when more hardware and software are required.
With computer server financing along with other forms of computer hardware and software, the term of financing may be slightly shorter than with other types of assets, and certain lenders may also require larger deposits than they would on other types of assets.
But regardless of the scenario, there is an excellent chance that computer server financing can be arranged for your company.
If you have been in business for at least three years and have a positive cash flow, then computer financing is very likely for your business provided that you also have good credit to draw on.
For businesses that are newly formed or still in a start up phase, items like computer servers can still be financed, but the credit approval is going to rely more on the strength of the personal guarantees and credit profiles of the business owners or major shareholders of the business.
Computer equipment financing requests under $25,000 can many times be approved based on credit alone. So with the number of equipment financing companies out there that finance computer assets, its also very possible to spread your purchases around to take advantage of the credit that is available to you collectively versus focusing all your needs with one lender.
That being said, for well established businesses with solid cash flow, computer server financing can be arranged in amounts well over $100,000 and even over $1,000,000.
If you have a specific computer server financing requirement, I suggest that you give us a call so we can do an immediate assessment of your situation and provide financing options that meet your needs.
It wasn’t too long ago that most companies were just resigned to the fact that items like computer equipment, office equipment, and phone systems were likely going to be paid out of cash or through funds available in the company operating loan.
The challenge was that these types of equipment financing opportunities did not provide any significant security to a lender or leasing company so it was traditionally difficult to secure financing outside of manufacturer related programs.
That’s all changed in the last number of years and now computer equipment financing is a growing part of most equipment financing companies’ portfolio.
From a lender or leasing company point of view, the reasoning here is that most computer equipment purchases are for relatively small amounts, predominantly under $100,00. And if the repayment period is stays within 3 to 5 years, the risk of loss to well established companies is statistically very low even though there isn’t a great deal of security inherit in the assets.
But the other thing that financing companies are trying to take advantage is the repeat business that technology continually creates. So by financing computer assets within a certain comfort zone of the lender and keeping the leasing or loan term short, there is a good chance that the financing will be repeated over and over again in the future as new technology continues to be incorporated into the client’s business.
Unless your company has a limitless source of cash on hand, its likely getting its capital from some form or combination of debt financing sources.
If computer equipment isn’t directly financed, then the money is coming from another source of debt financing available to the business for working capital or other purposes.
When other funds are used for acquiring computer equipment, there automatically is less capital available for everything else, so financing computer equipment directly versus indirectly can have a significant impact on cash flow.
The actual cost of computer equipment financing you are able to secure is going to depend on a number of factors that are unique to your business including the company credit profile and financial profile.
That being said, the actual cost of any source of financing is affordable if application of the capital you free up from computer equipment financing can be redirected into a profit generating or cost saving activity that is greater in value to the company than the cost of the equipment financing for computers, office furniture, and/or phone systems.
In many cases, you can secure computer equipment financing at or near 100% of the acquisition cost providing considerable debt financing leverage to your business.
If you’d like to know more about computer equipment financing and if it would be a fit for your business requirements, please give us a call and we’ll make sure you get all your questions answered right away.
Computer hardware financing is a growing segment of the equipment financing market. Even though the actual asset can offer little in the way of hard security value to the equipment financing companies due to the speed with with technology can go out of date, there is still a tremendous volume of computer hardware going into the market every day. Lets face it, every business now a days requires computers. And with the average purchase price for most businesses being under $50,000, the computer equipment financing process is more focused on existing cash flow of the business and its credit profile than what the computer hardware being acquired is going to be worth in a couple of years.
And even with larger purchases well above $100,000, there are still computer hardware financing options out here. Larger amounts, however, will require stronger balance sheets and established cash flow to offset the risk of loss to the financing company.
Another reason why computer hardware financing is becoming more readily available is that it allows equipment financing to build up a clientele that will come back again and again for more computer equipment purchases in the future as well as other assets the business may require.
In terms of computer equipment financing amounts, an equipment lease or loan can be arranged for a purchase or acquisition as low as $1,500. Equipment loan or leasing facilities can also combine multiple items into one financing facility. And if a small business requires more financing than any one leasing company is prepared to give them, they can also split up their purchasing requirements among leasing or lending companies provided that the borrower or lessee has a strong enough credit profile to support the overall level of depth.
Equipment loans are typically provided through institutions that participate in some sort of government sponsored loan insurance program. Equipment leases can come from a variety of sources, each with their own requirements with respect to credit history, cash flow, and corporate or personal guarantees to the leasing facility.
Equipment leases can also come in the form of an operating equipment lease or capital lease, depending on your cash flow and/or taxation requirements.
If you have any questions regarding computer hardware financing, give us a call and we’ll make sure all your questions get answered.
Software financing is still not widely available among financing companies, but it is growing in popularity as a way for equipment financing and equipment leasing companies to grow their portfolios and add long term customers.
Software financing options are typically done through an equipment or asset lease from a computer equipment leasing company. Because the financing commitment is largely based on the financial strength of the company and credit profile of the company and owners, different lease financing companies will have different considerations when it comes to financing software. For instance, there are companies that will only look at software purchases under $50,000, fewer that will look at amounts under $100,000, and a much smaller group that will consider applications in the hundreds of thousands of dollars.
So if you have a software financing need, it will be important to make sure you’re applying for equipment financing for not only the type of software you’re looking for, but the amount as well.
This is a growing segment of the asset financing industry in that software is a growing market and every business needs to invest in software. And because of the rapid changes in technology, additional software purchases are going to be required over the life time of the company, setting up the opportunity for leasing companies to acquire repeat business at potentially a faster rate than what they would expect for other types of assets.
Because this is more of a specialized form of asset financing, you would be well served to work with an equipment financing specialist that has strong software financing sources for a broad range of borrower or business requirements. This will get you working with the right financing or leasing company faster, allowing you to not only secure the software financing you’re looking for but, but also securing the best available rates and fees for your specific situation at a given point in time.
The stronger your companies financing profile, the better rates and terms of repayment you can expect to secure. Operating leases can also be secured to provide both taxation and cash flow management options for the business.
If you have a software financing requirement, we suggest that you give us a call so we can quickly assess your requirements and provide relevant software financing options that meet your needs.