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Many UK businesses are turning to more innovative options when it comes to paying for IT, software and other soft assets. The latest figures from the Finance and Leasing Association show that the IT equipment finance sector reported a second consecutive month of strong double-digit growth as new business increased by 41% compared with the same month the previous year.
These figures suggest that rather than funding the entirety of a soft asset purchase upfront, businesses are becoming more open to using finance options to spread the cost. This makes a great deal of sense when it comes to purchases of assets like software, which are used on a monthly basis and enable the business to more closely match this expenditure with their income stream.
Soft assets typically include IT hardware and software, security equipment and furniture and fittings – assets that are essential to the day to day running of the business but fall outside the traditional hard assets category.
The difference between hard assets and soft assets?
Soft assets are those that are not hard assets – such as plant and machinery, vehicles and commercial property – and which typically have little or no resale value. Soft assets can sometimes include intangible assets like the company’s brand, intellectual property or even cloud-based storage. Not all intangible assets can be financed, but some can be.
For most businesses, the ability to function day to day relies on the effectiveness of communication systems, the speed and capability of software and the dependability of your IT systems and other hardware.
Other examples of soft assets that can be funded via finance are:
Leasing your I.T hardware and software
As the FLA figures suggest, IT equipment is one of the most common forms of soft assets financed in the UK. While hardware finance is now relatively well understood, many companies still don’t consider software finance as an option.
Many businesses are not aware that they can lease their preferred software in the same way that they might lease PCs, printers, and other office equipment.
The benefits of leasing computer hardware and software?
Businesses that finance their hardware and software, rather than buying them outright, benefit in several ways. The principal benefit of software finance is cost! Enterprise level software packages can be prohibitively expensive for a small business, but if finance can bring such software into reach it can bring a significant competitive advantage to a growing company.
Using soft asset finance, businesses can spread payments over monthly instalments. If you later need to upgrade or scale, the finance agreement can usually be amended to meet your changing requirements.
A finance agreement can be tailored to your exact needs. Leasing IT hardware and software allows your business to keep up to date with the latest upgrades and means you don’t have to be worried about software becoming ineffective over the long term.
News Article sponsored by Halo Corporate Finance