Software Leasing, is it a good idea?
Equipment Leasing companies and Banks typically tend to avoid certain industries and items. Software is one of those industries that lenders tend to avoid. Generally, it’s a little more difficult to underwrite, but there’s many benefits of financing software. Finding a qualified company to process your software lease can benefit your company greatly with Section 179 and tax deductions.
Why you should lease your software
Software financing is a very complex and confusing arena to navigate. Why would you finance software instead of saving and purchasing it outright? Especially if you’re able to purchase the software outright, why even bother with leasing? Below you will learn about the benefits of financing software.
The reason is that leasing software allows you to stay up to date with the latest software. A great example is CAD software that is always constantly upgrading and improving. Do you want to rely on trucking logistics software that is 5 years old? Unfortunately, software licenses are costly additions to any businesses expenses. In any competitive industry, staying up to date with the latest technology advancements and software is crucial to staying competitive. In addition, as hardware improves it requires the software to go along with the newer more advanced hardware. This reason alone is an excellent argument for leasing software.
The second reason why you should lease software –Keep your cash flow free. The fact is, lots of us can see these purchases as a nuisance. A common complaint we hear is “ Why not bundle the software with the hardware? “. Hardware does not change as often as software; however software continues to update and requires maintenance. Keep your cash flow free and stay updated with the latest versions of software and technology. Leasing allows you to take advantage of the latest versions and having upgrade agreements written into the lease.
Although there’s plenty of software leasing advantages, The Big Banks still frown away from financing software. The biggest reason is that Banks can’t see the value that software can add to a company. Whether it’s integrating Cloud software or new CRM, there’s advantages that only alternative lenders like Providence Capital Funding can provide.
If you are interested in software financing options for your business have a look at our IT Equipment section to learn more information about both hardware and software. Lastly, if you are interested in getting started on financing software for you business, you may fill out our quick online application to get started.