Personal Finance

The very terms “software leasing” and “software financing” are confusing to many businesspeople. This is due to the fact that software is typically not seen as something that is purchased over time.

This view is shared by both end-users, and the developers of software. Companies who think nothing of financing a vehicle or a new computer system will stress over how they will pay for expensive new business software. And the producers of software see no need for offering a software leasing or a software financing option.

But times are changing.

Third party equipment finance companies – companies who offer small and medium size businesses equipment financing and working capital – have responded to a need for software financing and software leasing. Thus, they are starting to include software amongst the equipment they finance or lease. There is one big overriding reason for this shift:

The High Cost of Buying Software

The simple fact is this: Software can be very, very expensive. Oftentimes more expensive than the hardware that runs it.

Now, keep in mind that when we are talking about software in this way, we are generally talking about “vertical software”. Vertical software is software that is written for a specific, narrow industry (this can include industry-specific point-of-sale software, ERP systems, specialized databases, etc). It is not software that’s available on the shelf at your local office supply store (the software you see there, even the business programs and operating systems, are “horizontal software” – they can be used across a variety of industries, and are relatively affordable.)

A good, clear example of vertical software is an auto parts store – they use software that’s specifically written for the auto parts industry. Another example is your local jewelry retailer – they likely use a point-of-sale system specifically made for the jewelry industry.

To understand how software financing and software leasing can positively affect a business, it is important to understand the advantages of vertical software first.

For most businesses, Vertical Software usually means far more efficient business processes. In the case of an auto parts store, for example, the software will already anticipate the thousands of automobile makes and models. And will almost certainly be updated every year. The jewelry store’s software will differentiate the subtle differences between two diamonds by any number of categories. And so on.

In fact, these “vertical” software programs are so effective, and become so crucial to day-to-day operations, that businesses often need this type of software to remain competitive. In many cases, it’s not an option to do without.

However, since the software is so narrowly focused, it usually comes with a hefty price tag. The developer will sell relatively few copies as opposed to a word processing program (which will sell in the millions), so they must get a premium for their work. Vertical software can sometimes reach five figures for a single license.

This brings an obvious problem: “Businesses need the software, but it’s very costly to buy outright.”

And that’s where software leasing and software financing come in – business don’t have to “buy” it upfront.

The Advantage of Software Leasing and Software Financing

The advantage of financing or leasing software is clear:

Software leasing and software financing take the huge up-front cost of new software out of the equation. Like most other business equipment, software is now beginning to be seen as a tangible asset (this was not always the case.) This means software can largely be treated as any other equipment purchase in the case of financing or leasing. A business can finance that new ERP system instead of having to budget a huge cash outlay.

This can be very beneficial to the bottom line, as software generally pays for itself over time. In fact, since “vertical” software almost always reduces the cost of doing day-to-day business, leasing or financing said software can actually create a positive cash flow right away.

But Who Offers Software Financing or Software Leasing, and how does it Work?

It’s true that software developers have been very slow to embrace the business model of software financing or software leasing. They would prefer to be paid up front for their software.

Likewise, banks, being part of an “older” industry, are also largely reluctant to finance software.

However, third party equipment finance companies who specialize in small and medium sized business equipment financing often offer attractive software lease and software financing packages. What happens is the equipment finance company pays the developer in full, and then provides the software to the end user under a finance or lease agreement, often at very attractive rates. In all actuality, it’s fundamentally the same as financing or leasing most other equipment.

Of course, like any other financing, the agreements can (and will) vary from traditional fixed rate financing to a “software lease” with a buyout at the end, etc. And the rates and terms also vary – your individual equipment finance company will have more details.

All in all, software financing and software leasing have definitely entered the business consciousness, and because it is so friendly to the bottom line, it is a business model that is here to stay.

Software leasing and Software financing are only a few of the services provided by Crest Capital. Regardless of the size of your company, Crest Capital can provide you with the equipment financing and working capital you need to successfully grow your business. Learn about financing options that can increase your bottom line and reduce your 2007 tax bill with a free online quote today.

Some would say Debt Consolidation is nothing more than a “con” because you think you’ve done something about your debt problem. The debt is still there, as are the habits that caused it! This may be true to a certain extent however, obtaining lower interest rates on your debt is always better than continuing with high interest rates.

David Bach, noted financial author, says There is, a simple solution. The one way to create lasting financial change that will help you build real wealth over time is to . . . MAKE YOUR FINANCIAL PLAN AUTOMATIC! Making your financial plan automatic is the one step that virtually guarantees that you won’t fail financially.Why? Because by making it automatic, you will have set yourself up for success. And as you will learn in this little book, you can do this in literally minutes.

How Does Debt Consolidation Work ?

Debt Consolidation helps those with high interest rates obtain low interest rates. Typically, the new rates will range somewhere between 0% to 10 %. Most of the time Debt Consolidation clients are set up on an automatic payment draft. That way they do not have to worry about paying each creditor each month. The payment process to each creditor is done for them. There is no prepayment penalty so clients can always pay more than the minimum amount required. Also participation in Credit Counseling is NOT factored into your FICO® score. www.myfico.com

Debt consolidation is very appealing because you can obtain lower interest rates and a lower payment amount on the debt you owe. It is not a loan so you do NOT have to qualify or put up any of your assets. The person consolidating their debt always has the option to pay more. It is recommended that you pay as much as possible to get out of debt that much faster. The payments on these programs are typically done automatically. By having the debt consolidation draft done automatically you forget about it. Debt consolidation is the best option for obtaining low interest rates fast without a loan.

Debt Consolidation Example

For example, let’s say you have $30,000 in unsecured debt, at an average interest rate of 20%. Let’s say your total monthly payments on the $30,000 of credit card debt is $660 per month. Without debt consolidation and by paying just the minimum due, the total amount of money you would pay getting this debt paid off would be $396,660.00. If you joined a debt consolidation program, paid a level payment amount each month and your average interest rate was lowered to 10%, the total amount of money you would pay to get your debt paid off would be $38,280.00. Sounds great, doesn’t it? Who wouldn’t want to pay $358,380.00 less in payments?

Debt Consolidation allows you the opportunity to lower interest rates and lower payment amounts however, if you do not change your spending habits you will eventually end up in the same situation you are right now. The best way to do this is to make a budget for yourself. This will help you target non-productive spending. Use our quick budget calculator at www.debtsolutionsusa.com to get started. Debt Solutions USA is a leader in this industry and can help you get out of debt fast. Debt Solutions USA is BBB Accredited and Approved and also have an A+ Rating. Get your free no-obligation quote now at www.DebtSolutionsUSA.com  Try Debt Consolidation Today!

Credit Card Debt Consolidation is not a loan so you don’t have to qualify or put up any of your assets. You can include current or delinquent unsecured accounts into the program. Your interest rates are either eliminated or reduced and that is in most cases. Interest rates will usually range somewhere between 0 to 9.9% once you have joined the program. By having this happen you should get out of debt up to 75% faster than you normally would. This in turn will help you build a better credit rating and score. Once your account is set up, you will make one payment each month and that payment will be distributed each month to the creditors you have included into your program. By joining this type of program you are not defaulting on your debt  therefore you can not be sued by your creditors. Default typically happens after 4 to 6 months of non-payment. Be very careful of any company advising you to stop your monthly payments to creditors. Read more at www.debtsettlementscams.com    

Most Credit Card Debt Consolidation programs usually last between 3 to 5 years and may be the fastest and most effective method of eliminating unsecured debts without a loan. Creditor payments are consolidated into one affordable monthly payment. The payment amount and payoff period quoted to you on Debt Solutions USA’s free no-obligation quote system is 90% accurate. Keep in mind you can always make a higher monthly payment if you chose to. Making higher payments will help you get out of debt faster than the proposed payoff period quoted. There is no prepayment penalty. The program will end when you are finished paying off your included debt or if you cancel the program.

Participation in Credit Card Debt Consolidation is NOT factored into your FICO® score.

Usual benefits of the program are:

Elimination or reduction of interest rates Reduction of monthly payments Stop collection calls. Proposals will go out to your creditors approximately 10 days after your designated draft date. Elimination late fees and over the limit fees Re-aging of past due accounts to a current status (usually done after making 3 consecutive payments) Re-build your credit and credit rating Consolidate your bills into one easy and affordable monthly payment The management of your debt to ensure the earliest possible payoff Restoring your peace of mind through goal orientated financial management and  budgeting analysis. Reduce creditor collection efforts because they are now being paid each month. 

Companies such as http://www.debtsolutionsusa.com offer information and a free no-obligation quote at https://www.debtsolutionsusa.com/credit-card-debt-consolidation.aspx