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.