Why Financing Your Software Subscription Is a Smart Business Decision

Grow you Business with Software Financing
Grow you Business with Software Financing

Why Financing Your Software Subscription Is a Smart Business Decision

Many businesses have moved to a variety of software to streamline their business processes including HR, billing and invoicing, tax management, and point of sale systems, property management programs, cloud-based programs, ERP, CRMS, and much more.  Many companies pay for the subscriptions upfront along with the costs of implementing the software, which can be considerable. This can impact the working capital and cash flow of the company, particularly for small and medium-sized businesses. Financing can be a way of meeting your software needs while still maintaining cash flow.

Financing for Software Subscriptions

You might not realize you can obtain financing for software your company uses, including software renewals. While you might not necessarily need a loan for your software subscription renewals and payments, financing can help you keep your cash on hand, particularly during economic downturns and give you stability and certainty in your financial position.

Financing business software subscriptions gives the opportunity for your business to choose monthly payments rather than lump sum payments. Yearly subscriptions mean paying more money upfront. Financing addresses this concern by providing the money for expensive software subscriptions and allows businesses to pay for the subscription and renewals in monthly payments.

Using financing to prepay for multi-year subscriptions also locks the software company into the original pricing for the term of your subscription. This means that even if the software company increases their fees and pricing, the price you paid when you choose a multi-year renewal is the price you get for the term of your subscription.

When implementing new software, businesses also have the cost of implementation and the training their employees on how to use the software. The implementation and training can cost more than the actual software, especially when you have many employees that need to learn how to use the software. Financing through a private funding company such as Dimension Funding can provide the funds for training, implementation, hardware, and third-party vendor costs. Bundling these costs along with your annual subscription fees allows you to break down the cost into low monthly payments that are more affordable than fronting all the cash at purchase. This allows small and medium-sized businesses to invest in software they might not otherwise have access to due to financials.

What Else Should Business Owners Consider with Software Financing?

Depending on your business, a traditional bank loan is not always an option for financing. Banks often put a blanket lien on all of the company’s assets as collateral. Financing companies generally are unsecured as they only use the software / hardware as collateral. Banks are also not always keen on offering financing solutions for businesses that haven’t operated very long or small businesses that don’t have a lot of cash flow. Banks also require a lot of paperwork and can take weeks to approve you for a loan. These reasons are why so many small and medium-sized businesses are finding solutions in private funding groups such as Dimension Funding.

Small, privately owned financing companies for businesses make financing your software subscriptions easy to understand. There are often no lengthy financial records needed, and good credit can get businesses fast approval in less than 24 hours. Many of these financing companies, like Dimension, offer online applications and DocuSign so you don’t have to print out the paperwork and scan it back. Businesses also have a unique opportunity to be able to finance their business hardware and professional services alongside their subscriptions with many of the private financing companies.

Business owners should consider upgrading their hardware, such as servers, computers, printers, and office equipment through private financing companies. An investment in your business technology can streamline your processes and leave your clients satisfied. Professional services, implementation and training costs related to new software and hardware, as well as the delivery and maintenance of the new technology can also be financed and bundled with the software subscription.

Why Choose Private Funding?

If you’re trying to take your business to the next level and invest in technology and you haven’t been in business for long, you’re generally going to get told “no” by banks. Traditional bank loans can be difficult for many small to medium-sized businesses to get. Private funding offers more flexible term options, less paperwork, and financiers who understand your business needs.

Private funding companies like Dimensions also work as financing partners for vendors and can offer working capital loans that can improve your cash flow management. Private funding companies offer business financing solutions that work for owners to improve and expand their business. Dimension Funding and other private funding companies can also help with equipment needs, with everything from computers to furniture to fleets and construction equipment and tools. Funding companies don’t just offer loans; they offer business solutions tailored to your business needs.

If you are interested in discussing funding and financing for your company, contact Dimension Funding at 800-755-0585.

The Types of Financing Your Wireless Business Needs to Grow

Types of Financing for Wireless Providers
Types of Financing for Wireless Providers

The Types of Financing Your Wireless Business Needs to Grow

Small and mid-sized wireless providers face a new challenge. The current coronavirus, COVID-19, a pandemic that is sweeping the world, has shown businesses and educators that there is another way to conduct business and school—online at home! As schools are scrambling to meet the needs of students that lack internet access, employees are desperate to find a reliable wireless provider that meets their needs. Rural communities and communities with a lack of options are finding the transition into a more digital world difficult and frustrating.

Wireless provider companies have an excellent opportunity to rise to the occasion by expanding their networks and subscriber areas into new communities and increasing their Wi-Fi capabilities with faster download and upload speeds, more bandwidth, and better reliability. The problem that these wireless providers face is the ability to pay for all the upgrades and expansion. Without an upfront increase in subscribers, how can a company gain capital for growth?

There are four types of telecommunication companies that are addressing internet needs. Broadband internet is the method of delivery used by these companies and is the industry standard for high-quality, reliable internet. Cable, WISPs, FISPs, and Hybrid companies will each have different financing needs and methods for obtaining that financing. We’ll break it all down for you below so you can decide which methods apply to your internet company.

Cable Telecommunications Companies Financing

Cable operators should be looking to the future and how they can implement new wireless solutions to their traditionally wired models. Many wired providers are focusing their 2020 expansion efforts on becoming a hybrid solution that can offer both wired and wireless internet options for residential and commercial customers.

One of the ways cable operators are entering the hybrid space is by expanding their infrastructure to get more cable fiber laid throughout communities. Expanding your infrastructure is a costly expenditure, and many small to medium-sized cable operators don’t have the capital to expand without the customers already locked in. Luckily, banks are beginning to understand the financing needs of internet providers. However, there is still a long way to go in trying to reconcile asset-backed collateral with the projections of financial growth and the ability to repay when the monthly cash flow may not be reflected yet.

WISPs Challenges in Finding Financing

Wireless internet services also provide broadband internet access and are one of the fastest-growing, albeit newest, forms of internet provider services. The return on investment for WISP company owners is much higher than the other competitor companies. WISP companies are generally aimed at increasing their subscriber base through expanding their infrastructure.

WISPs need financing to expand their infrastructure throughout neighborhoods by adding fiber to connect more broadband pipes to towers. In-home technology also needs to be top-of-the-line and high quality if WISP companies want to be competitive. More towers and antennas are needed and are some of the most expensive technology to build and operate.

WISPs have one of the most challenging times obtaining financing through traditional banks because of the lack of collateral these businesses have. Many bankers do not want to take the risk in lending to WISPs based on growing subscriber bases that could fluctuate at any time.

FISPs Financing

Fiber Internet Services Providers are very similar to WISPs because they use fiber to transfer the internet. Fiber is the most reliable and considered the optimal way to deliver internet access. Most WISPs that use fiber are often considered to be hybrid because they can offer wired connections through fiber as well. FISPs and Cable operators are the most trusted internet service providers currently on the market and generally have much better success in obtaining traditional financing.

Hybrid Internet Service Providers

One of the ways that internet providers are finding is the fastest, easiest, and most profitable way to expand and grow is to become a hybrid internet service provider. As cable operators begin to offer wireless solutions and WISPs begin to expand by laying more fiber and broadband pipes, these companies become hybrids.

Fiber is costly to deploy because of how labor-intensive the process is concerning wireless solutions that rely on tower signals and in-home equipment. Because fiber is the most reliable, internet providers need to begin using fiber in their operations. Many hybrid companies use fiber in their towers, however, and don’t always run fiber straight into consumer homes.

5G and Wireless Expansion

One thing that all internet service providers need to invest in is the 5G technology the world is seeing spearheaded by the United States. This new technology is expected to be the leading mobile network technology by 2025, and home internet companies need to get on board as 5G changes the landscape of wireless access.

Financing Solutions for WISPs, FISPs & Other ISPs

When banks fail to understand the financing needs of WISPs and other service providers, these companies may also face a stall in their expansion and growth efforts. One way to get the financing these providers need is to go through capital investment funding. These sources of funding are great for small and medium businesses, entrepreneurs, and operators that need financing for equipment, software, IT equipment, commercial trucks and trailers, and more.

Working capital loans are also an excellent solution for small and medium telecommunication companies that need extra cash flow for things such as payroll and business expenses. Repayment terms are often flexible, including monthly, weekly, or even daily payment options with low-interest rates and easy to understand terms.

Private funding groups often look at more than just collateral when they are determining the loan you qualify for and focus on annual revenue and bank statements showing the cash flow of the business. Working capital loans through private funding companies will also be different than the loans offered for equipment or software financing specifically.

When companies need specific financing for ventures such as new equipment and material to expand their infrastructure, the terms and conditions can be different than a loan that is for any business expense. Some of the differences can include interest rate and term length.

If you’re more interested in learning about financing for your internet company, contact Dimension Funding to get started on your approval process. 

Does Purchasing a CRM Multi-Year Subscription Make Sense?

CRM Multi-Year Subscription
CRM Multi-Year Subscription

Does Purchasing a CRM Multi-Year Subscription Make Sense?

There are several schools of thought when it comes to CRM multi-year software subscriptions. One is that the company doesn’t want to be locked into a subscription for more than one year unless they are absolutely sure that in a year from now they will still want that software. They want to be able to just stop using it or switch to another subscription software.

Is this a reasonable perspective?

Companies Generally Stick with Their Current CRM

According to the Capterra CRM Industry User Research Report, 60% of companies still have the same CRM as when the company started using a CRM. Of the 40% that switched to a new CRM, over one-third said it was because the CRM provider was no longer supported / went out of business.

What this says is that companies are unlikely to switch CRMs except in very limited circumstances. Why do companies keep their current CRM?

CRM Implementation Time

The time to implement a new CRM is very high. According to the Capterra Industry Report, 60% of respondents said that the actual time to implement their CRM took 6 months to a year. According to the same Capterra Report, 40% of respondents reported that it took over a year to implement a new CRM. 

This is a tremendous investment of time, money & personnel.

Satisfied with Current CRM

According to the Capterra Report, 71% of users said that they were satisfied or very satisfied with their CRM. Another interesting statistic is that users become more satisfied with their CRM the longer they had the CRM. This lines up with users being able to use the CRM more effectively.

Changing Technology is Very Expensive

Changing to a new CRM is a costly and personnel intensive endeavor. Your CRM is usually the center of your company and integrated into your accounting, marketing automation and ERP systems. To decide to change to another CRM is not made lightly but with the knowledge that it is a big commitment for your business of time, money & resources.

Advantages of a Multi-year Subscription

Before you decide whether to get a one-year subscription or a multi-year subscription, let’s investigate some of the ways getting a multi-year subscription can benefit you.

One-Year Subscription Annoyances

While getting a one-year subscription may seem better at first, with it having the illusion of being more flexible, this is not always the case. In fact, going with one-year subscriptions can cause a lot of headaches and end up costing you more money in the long run.

This is because not only do you have to keep track of when the subscription ends and renew it every single year, but you also are subject to paying more if the price increases from year to year. 

By signing up for a multi-year plan, you can set your company up for the long-term and not have to worry about renewing your subscription for however many years you wish. It also allows your company to invest in training, customization & process redesign.

Lock in a Lower Rate

If you purchase a multi-year subscription, you will be locked in at that price for as long as your multi-year plan lasts. This means you don’t have to worry about price increases and can continue paying the same rate. So, if money is a concern, then going with a multi-year subscription will end up saving you the most in the long run since you will be safe from price increases.

Multi-year Software Discount

Additionally, you can usually get the subscription at a reduced cost when you sign up for multiple years. The reduced cost of the subscription can be a substantial amount and is usually more than the amount needed to pay for any financing of the entire subscription purchase including hardware, consulting and training costs.

With the right financing, you can convert the subscription to monthly payments including the implementation & training costs, the maintenance costs and the hardware & IT costs.

This reduces all of your costs to a fixed monthly payment with the additional cost of financing being paid for by the reduction in the cost of the subscription because of the multi-year purchase.

Allows for Customization

While you will need to decide as to which method is better for you and your company, going with a multi-year subscription has been shown to have its advantages. Namely, they are more convenient as well as more cost-effective. Also, most companies keep their CRMs for many years and only change when the CRM no longer offers the features that the company needs or because their current CRM is no longer supported. As stated above, the longer that a company has its CRM, the happier the company is with the CRM.  This is probably at least in part because it allows the company to invest in customization, redesign and training. If you are only keeping a CRM for a year, it doesn’t make sense to invest in customization.


But there are still legitimate reasons why a company would prefer to manually renew their plan on a yearly basis, such as the ability to end their subscription sooner if they feel like it’s not working out. So, it’s important to consider all of the benefits and disadvantages of both before making a final decision.

Implementing Electronic Medical Records (“EMR”) Software for Small Healthcare Organizations

EMR & EHR Implementation
EMR & EHR Implementation

Implementing Electronic Medical Records (“EMR”) Software for Small Healthcare Organizations

In order to comply with the HIMSS EMRAM, many hospitals are adopting EMRs in order to move their organization closer to achieving a paperless environment and improve the quality of patient care. Many doctor’s offices, clinics, and managed care facilities are going to EMRs or EHRs because of the convenience of going to paperless recordkeeping.

Also, many healthcare facilities are trying to improve the patient satisfaction levels and having an EHR or EMR is a big part of their solution. By allowing hospitalized patients to review their charts, order their dinner, access the internet or watch TV via electronic means, it improves the overall patient experience, particularly for extended hospital stays.

Adopting electronic medical records comes with its own set of problems. It can take months or even years to fully incorporate or update an EMR system depending upon the size of your organization and the level of HIMSS compliance that you wish to attain. It can also come with a large price tag.

Implementation is An Expensive Process

A major issue with EMR software is how expensive it can be. Implementing a full system for an EMR can cost over $150,000 for just one physician. The total cost, of course, grows much more expensive the larger the medical facility and the more advanced the software and hardware.

Because of this, it’s important for any medical facility looking to implement an EMR system to consider the high cost into their budget. Not only is the upfront cost of implementing such a system high, but it needs to be maintained and occasionally updated to keep in line with the latest regulations.

So, it’s imperative that these costs be taken into consideration when managing an EMR system for any medical organization, whether it be a large hospital or a small physician’s office.

Required Training

Another important thing to keep in mind with any EMR system is the training that is required to use them. This training includes medical personnel & doctors as well as staff. It can involve a whole new system of doing things within the healthcare organization when they move from paper to computerized records. It can take many months and sometimes years in order to completely implement an EMR system.

This creates yet another cost that must be factored in when considering the budget for the EMR system as well as a hurdle that needs to be overcome before the system can even be used in the first place.

Cutting Edge Software and Hardware

When moving from paper medical records to electronic records, most healthcare organizations will need new hardware, security and IT personnel. This can be a large investment. The computers will need to have the capacity to run the EMR software and any patient satisfaction software. You’ll want computers that are able to do double-duty: be used by the doctors and staff to enter information and, for patients who have overnight stays, a patient engagement platform so that they have a good experience with the hospital or healthcare facility.

Additionally, for many healthcare organizations, it’s likely that it will need tablet PCs with scanners in order to scan prescriptions, patient wrist bracelets, and implement other patient tracking requirements.

There are also security concerns with electronic records including HIPAA requirements that means investing in security technology and IT personnel.

All this adds up to a substantial investment in new hardware and personnel.

Options for Small to Medium-Sized Facilities

Many smaller healthcare organizations can’t afford the substantial upfront costs of implementing an EMR system. The solution to this is to finance the upfront costs and the subscription itself. This allows the organization to pay for the EMR and its implementation in monthly payments over an extended timeframe which is much more manageable.

However, the decision to finance an EMR needs considerable attention as there are a lot of factors involved, including deciding on a finance company, determining how money needs to be financed, and factoring in the monthly payment along with all the other monthly costs that the organization must budget.

Fortunately there are companies with specific expertise in the financing of EMR/EHR solutions that can work directly with busy practices to help them create a financing program that meets their objectives and enables a simple, easy and efficient solution that enables all of the various costs of engagement to be aggregated together with one monthly payment over a term that meets budgeting requirements.

One of the primary goals of the practice when considering the EMR/EHR acquisition is the ability to conserve their working capital and not disturb existing banking lines of credit. For that reason, many healthcare professionals have relied on financing programs and have found that results in the most economically feasible approach for moving forward.

Further, there might well be Section 179 tax benefits available when selecting to finance this important technology.


Save money on your taxes with the TCJA


Save money on your taxes with the TCJA

By now you’ve probably heard about the Tax Cuts and Jobs Act, President Trump’s major corporate tax bill. Known commonly as the TCJA, this law has already had far-reaching effects around the nation. But nowhere has its impact been felt more strongly than in the business sector. In fact, many industries will experience double-digit reductions in their tax liabilities under this new law (source: Ernst & Young).

If you’re wondering how the TCJA can help serve your company’s bottom line, you might find that major savings can come from an unexpected place—software that you buy and use to run your business. The TCJA has expanded companies’ ability to deduct the costs of buying, renting, and financing software more than ever before.

For more details about how much you can claim in deductions for business equipment and software, see the [first article in our series.] For now, here are four steps you can use to take advantage of software deductions for your business:

  1. Find out which software is eligible for deductions. The first thing you’ll want to do is learn exactly which types of software do and do not qualify for deductions under the TCJA. There is a specific list of parameters set forward by the IRS that determine eligibility.
    • The software has to be used by your business for the purpose of producing revenue, either directly or indirectly.
    • The software must have a lifespan of ‘usefulness’ that can be clearly determined (This essentially means that the effectiveness of the software for your business must be clear.)
    • The software must be expected to be functional for at least one year or more.
    • The software can’t be totally custom to your business—it must be available to the general public at large for purchase and not heavily modified for your company’s use.
    • The software can’t be purchased on an exclusive license. That means it’s not only your software, but can be used by others with their own licenses.
      This might seem like a lot of strict parameters, but the good news is that most software qualifies under all of these stipulations. As long as software is available to the public and used by your business for a clear income-generating purpose, you’ll generally qualify for the deduction.
  2. Learn how section 179 works and what it means. We discussed Section 179 in the [first post of this series]. It’s the section of IRS tax code that applies specifically to which equipment and software purchases can be deducted and for how much.
    Under the Tax Cuts and Jobs Act, the deduction limit for 2019 has increased to $1,000,000 with a spending cap on equipment purchases set at $2,500,000. You can also temporarily deduct 100% of depreciation costs for 2019, though this number will decrease in the coming years.
  3. Consider financing your software purchases. The TCJA’s new rules allow businesses to deduct the full cost of equipment and software purchases made by a business in the year those purchases are made. Amazingly, that also applies to financed purchases.
    What does that mean for you and your business? It means that financing software can actually increase your cash for the fiscal year. If you were to finance $100,000 in software in 2019, but only make $5,000 in payments over the course of the year, you’d still be able to claim a deduction of $100,000, resulting in savings of tens of thousands of dollars.
  4. Ensure your software purchases qualify. If you’re planning on taking advantage of the tax benefits of financing software for 2019, it’s important to make sure your purchases qualify. The IRS treats software much in the same way it treats all business equipment purchases. That means that to qualify, the software must be purchased and put into use in the same year that it’s being claimed.
    The software must also be genuinely new to your company, and it can’t have been bought from an entity that has any direct connection to your own.
    Software is an essential aspect of nearly every modern business and industry. And now, thanks to the Tax Cuts and Jobs Act, buying or financing computer software is a smart financial move in its own right. If your business is in need of vital software, there’s never been a better time.

If you’d like to learn more about financing software for your business, contact Dimension Funding today.

The Future of Software and How You Can Control Costs

Controlling Software Costs

The Future of Software and How You Can Control Costs

Controlling Software Costs

In the ever-changing world of technology, it is easy to get lost in the benefits and features of each new advance and not see the increasing costs that can be associated with having the best infrastructure to run your business. The larger concern is usually the high cost of maintaining hardware; a hosted, subscription software environment often seems a cash-flow-friendly complement. But be warned: While the upfront cost may look attractive, the amount spent over the long run, as well as the the impact of future costs to strategic planning, can make monthly subscriptions an extremely expensive option.

Here are some tips from our experience with clients making software-buying decisions.

  1. Know your costs for the next five years. Software is typically not used for a month or even a single year; the average life span for a software product is three to 10 years. Software companies would like you to think in the short term when making a purchase decision — thus the smaller, initial outlay so cost will appear less of an obstacle — but planning for the long term is where the savings lie. Depending on the provider, typical savings on the same software bought with your next five years in mind, compared to paying for it month-to-month in subscription fees, can be as much as 10 to 40 percent over the same number of years.
  2. Control automatic cost increases. Look at your subscription license agreement and realize how much the software company can raise the subscription price year after year. Many say the cost of renewing your subscription may rise as much as 10 percent each year. Purchasing for multiple years, or signing a multiyear contract, can avoid or mitigate this automatic cost increase.
  3. Research and establish your full implementation costs; look for prepaid or set pricing. Too often, not having an agreed-upon budget can nickel-and-dime your solution. We see customers who initially thought a project would cost $75,000 paying twice that to get it working properly. This can be due to myriad factors, but having the right partner, exploring the best solutions up front, and knowing what you need the software to do to make your company efficient and profitable can go a long way in controlling scope — and cost — creep.
  4. Find out what other software you’ll need to supplement the core solution. You’re usually not buying only the main ERP, CRM, or HRMS software, but will require additional middleware or third-party plug-ins to run the system properly. There are thousands of supplemental software programs used to help run the major platforms, and cost ranges are huge. It is extremely important to know this up front. We have seen clients duped into implementing less-expensive add-on software only to find later they actually need the more expensive option.

Know the full costs up front as much as possible. When you have this five-year plan and budget in hand, you can see the overall picture and better control your costs. So how then do you pay for all this to take advantage of the savings your plan provides and avoid cost overruns? There are various methods.

  1. Pay cash upfront. Cash is always king when it comes to lower total costs — but still recognize it may reduce much-needed working capital for your day-to-day operations. (Remember: Cash flow is why the monthly software-subscription model looks so attractive initially.)
  2. Use a line of credit. This will usually offer the best variable rate, but don’t forget that lines of credit are intended for short-term borrowing, not long-term assets like technology infrastructure components. Plus they may have additional fees, payment schedules, and other requirements and parameters when used.
  3. Get a fixed-term installment loan or payment agreement. Software can be financed along with professional services, maintenance, and most third-party software. Programs with low rates may let you take advantage of the prepaid discounts from software suppliers. These discounts can more-than-offset any finance charges and still give your company a substantial savings over the duration of your five-year plan. With a fixed term, you don’t need to worry about rising or variable interest rates, which makes your project budget far more realistic.

Payment Prudence: Why You Should Opt For Software Leasing

Software Leasing

Payment Prudence: Why You Should Opt For Software Leasing

Software Leasing

The role and importance of business software has changed dramatically in the past few decades, yet many firms are still treating software financing the same way they always have. Companies continue to purchase programs outright, even when they are of limited long-term value. Instead, you should consider leasing software for your business, especially if:

You’re Concerned About Capital

If you lack the cash to purchase valuable programs, leasing allows you to gain access to them immediately rather than having to save up money. This means you can reap any productivity or cost-cutting rewards the software brings now, taking full advantage of all opportunities to grow as a business. Even if you have the money, leasing leaves you free to spend more of it on other investments rather than sinking it all into digital purchases. These savings are further enhanced by the many tax advantages that come with leasing.

You Can’t Keep Up with Updates

If you don’t specialize in tech, you likely have trouble keeping track of new software updates. Even when you know new programs are available, you may not be able to judge how valuable they are to your business. Software providers have the specialized knowledge to identify and evaluate updates. Leasing also means you won’t have to spend money on programs that will soon become obsolete, limiting your potential for lost investments.

You Need a Myriad of Products

If your company relies on a wide range of different programs and applications, buying them all may create an enormous logistical and financial hassle. Leasing allows you to gain access to a multitude of products without the burden of purchasing each one. The examples/types of leased software include customer relationship management (CRM) systems, computer-aided design (CAD) programs, ecommerce software, and Point of Sale (POS) applications.

You Require Supplementary Services

Leasing software gives you access to a range of services that supplement the programs themselves. These include training your staff to use the software and customizing it to fit your unique needs. Providers also tend to offer troubleshooting and security services to you if you lease.

You Still Desire Ownership

If you still desire the benefits of ownership, many leases allow you to become the owner once the contract comes to an end. Such leases often require no additional payments, all while letting you reap the benefits of leasing prior to that point.

Dimension Funding offers the full range of business software products, along with quality support services, to all companies and organizations. For more information or to sign up for a lease, contact us