Frequently Asked Questions about Software Financing
What types of software can I lease?
Catalyst Software Finance provides financing solutions for a variety of software types including:
We also finance many kinds of software such as:
- On-premise software
- Subscription software
- Custom software
- Software implementations
- Maintenance contracts
- Complete project financing
- IT Infrastructure
Please keep in mind that Catalyst Software Finance does not provide financing for website developments.
How long does the financing approval process take?
The approval process for deals under $50,000 is quick, typically taking anywhere from two minutes to a few hours. For larger deals, it takes between 24 and 48 hours.
What amounts of financing can I receive?
Catalyst Software Finance can provide a range of financing options and amounts, from $5,000 up to $1 million, to suit your needs and the scope of your project.
Can I finance software if my business is new?
Yes and in fact financing is one of the most common methods start-ups have at their disposal to finance some or all of their initial software needs. You will need to provide a personal guarantee and a personal net worth statement, which we discuss below.
What are a personal guarantee and a personal net worth statement? Why do you need them?
Both personal guarantees and personal net worth statements can help to improve credit strength and reduce credit risk so you can access the best financing solutions possible. Both are usually used for new businesses that lack commercial credit histories and proper financial statements.
How much does financing cost?
Financing makes acquiring software incredibly affordable for many businesses. Your payments will be determined by the term and structure of the financing arrangement you choose and can be tailored to your cash flow needs.
How is the payment calculated?
Catalyst Software Finance will calculate what your payment will be by looking at each deal individually. We understand that software is an asset that cannot be re-sold, so its only value is to you.
Ultimately, the two main factors we take into account are:
- The size of the deal. Usually, the more you buy, the better your rate (and payments) will be.
- Your company’s credit history (through Equifax, TransUnion, and D&B). If your company is less than three years old, we will look the credit of the owner or owners. As the deal size gets bigger, our credit team will also likely want to look at your company’s financial statements.
Once we have all of the information we need, we create a plan that works for your business. It may involve no payments for a number of months, a seasonal lease that matches your cash flow, or 36 equal payments that enable you to maintain your cash flow and keep the bank content.
How do I account for financing on my financials?
It’s important to keep in mind that the financing option you choose upfront might have tax implications. If you have any questions about how financing will affect your specific business, we recommend speaking to your accountant in advance, as they can help you understand your best options.
How does financing affect my bank line of credit?
Rest assured that your bank line of credit will not be affected since you are not borrowing from it when you are financing.
How are the provincial taxes dealt with?
Any applicable taxes will be added to your payments over the term.
Are there different ways to structure payments?
Terms are normally structured from 12 to 36 months depending on factors like the type of software, scope of your project, and credit. Payment plans can be customized to suit your needs, but regular payments are typically made monthly, quarterly, or annually.
What happens at the end of my term?
This depends largely on the type of financing:
- With a capital lease, you simply need to pay a nominal fee ($10) at the end of your term, and you will own your software.
- With a conditional sales contract, you own the software when the term ends (no additional payment required).
- When using a rental agreement, Catalyst Software Finance owns the software at the end of the term. We can work with you to agree on a purchase price if you would like to buy it outright at the end of your term. Typically, rental agreements are used for tax purposes.
If I have questions, whom do I contact?
Catalyst Software Finance has a great team of people e who have each spent 10+ years working in the lease-financing space.
If ever you have a question, you can call Karen, Amber, Sue, or Denise at +020 12345678. You can also email email@example.com or hit the chat button, and one of our team members will be happy to help you out.