ss_blog_claim=bd50edc517cf0b7549fe6b5f63b6b5f8 The SLS Business Finance Blog: 100% Software Financing

Saturday, March 29, 2008

100% Software Financing

One of my vendors was surprised to find out that we can finance 100% of software license fees.

Why would anyone finance something that has so little residual value? Residual value is the buyout value at the end of the lease period. Software leases/financings always have a $1 buyout value at the end of the period. Software is such a great product to lease for exactly this reason. Think of the opposite effect for a moment. We are all encouraged to buy our home as early as is possible and affordable because real estate always rises in value over the long term. For an asset like a piece of software, it declines in value so rapidly there are no intrinsic benefits of ownership versus leasing. That makes it a great deal for the client. An excellent additional resource on the benefits of leasing a declined valued asset can be found here : http://en.wikipedia.org/wiki/Equipment_leasing.

My most recent interview on financing technology purchases for the small business can be found and heard on your favorite computer or MP3 player here: http://cdn3.libsyn.com/uip/UiP_March_27_2008.MP3

1 comment:

number said...

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