Why pay cash for IT when a funding solution is often readily available, that may be cheaper than paying cash…


Acknowledging that in today’s uncertain economic climate that you’re Cash and/or Bank Facilities may be better kept in reserve is important. In accepting this fact it is important to understand that many capital acquisitions can be funded in ways that create significant Cashflow benefits and often taxation benefits (These should be checked with your accountant).

Typically business will use finance options for cars, forklifts, plant and machinery; typically these are Consumer Mortgage, Hire Purchase, Finance Lease and Operating Lease, everyone in business is familiar with some or all of these products. Notwithstanding the a afore mentioned, when it comes to the acquisition of Software and services as part of an IT upgrade or replacement program there are a number of options that are not always considered; many of these options can generate significant cashflow benefits.

Imagine if you can a solution with some of these benefits:

  • Can be 100% unsecured including no Directors’ Guarantees
  • Application can be as simple as supplying full name and ABN
  • Can Finance 100% Services as well as Software and Hardware
  • The Financier makes no claim on the Software Licence
  • You are able to claim the same Tax benefits available when paying CASH for Off the Shelf Software
  • Early up front Tax Benefits greatly subsidises the purchase for the first two financial years, the Finance can make this purchase cost neutral initially
  • Can be up to 30% more cost effective than your own Bank.
  • Terms from 12 months up to 60 months can provide a payment structure to fit your Cashflow
  • Helps preserve all important Cash Reserves and/or Bank Facilities

And if capital expenditure is an issue the funding solution offered can be converted into an off balance sheet offering, that can be treated as an operating expense. We have three variants that satisfy this requirement a professional services agreement, a rental and an operating lease. All of these solutions still allow all components of an IT spend to be financed.

As in all matters, it pays to do the research, but, clever finance options can make the decision making process easier, especially if you can get what you need and not just what you think you can afford.

Ownership of IT equipment is really not that clever, the day you buy it, it is already obsolete, so the aim is to get whatever benefits or business edge that product can deliver without compromising your cashflow.  Over the years I have heard many people say that you cannot finance software and services; to overcome this many companies come up with invoices that only show the hardware etc. creating the double whammy of losing tax deductions and creating a potential problem with the financier.  There is a much better option.

Philippe Moktar of CSS Computer Finance has been financing IT for over 25 years and demonstrate a better way to keep your IT systems up to date and delivering the benefits you need.

Computers how did we ever exist without them?

Philippe can be contacted on 03 9690 5000 or pm@cssfinance.com.au www.cssfinance.com.au