I’m kidding – of course you have. You can’t watch or read the news today without hearing about AI, and if you follow the stock market even a little bit, it’s been front and center for nearly two years now.

AI is pretty amazing so far, and it will only get bigger, better, and more useful. While it’s difficult to predict any kind of definitive applications, I feel comfortable saying it will be an essential part of our lives, especially in a business sense.

One thing I do feel will happen is that many industries will see a definitive AI software application introduced in the next few years. It’ll be one of those industry-specific applications that will become the gold standard. Either you get it, or you’re on the outside looking in.

While I cannot predict what industries this will happen to or what the applications will actually do, I can tell you that Crest Capital will likely finance it. 

Software financing is something I don’t talk about a lot. This is because equipment financing is traditionally thought about in the tangible equipment sense – machinery, vehicles, fixtures, trailers, heavy equipment, office machines, computers and servers, and many others. Software usually doesn’t spring to mind.

However, it should, because there’s a lot of industry-specific software out there that’s quite expensive and a great candidate for financing. That Point of Sale (POS) system that only your industry uses can be quite costly. 

For example, take an auto parts store – they use software specifically tailored to their services. However, it likely costs as much to develop as common business applications used everywhere. But there’s a massive difference in potential sales. Where every office in town might use a common business application, how many auto parts stores are in your town? One? Two at most? Maybe none? That drives the price waaaay up. That’s why the specific software your company probably uses costs so much. 

Heck, staying on the auto theme, I knew a guy who developed an application specifically for tire retreading (I helped him write the manual for it.) Since his customer base was so small, he had to charge a premium for this piece of software (a finance-worthy premium). But it made operations so much easier that it was worth it for his clients. 

Yup, software financing is something we definitely do, and I feel the need for it will be growing in the next few years as well. We’re here if you need us! 

To refresh your memory, during the busy holiday travel season, Southwest Airlines canceled a great majority of their flights. At first they blamed the weather, but that narrative didn’t last long. After all, every other competing airline, serving the exact same airports, had scant issues with the weather. Sure, there were a few storms, and other airlines had to cancel / move around a few flights, but nothing even remotely approaching Southwest’s issues.

It was then revealed that Southwest’s software was outdated, and not up to the task of efficiently scheduling pilots and crews amidst a hiccup (like a winter storm.) It was also revealed that they knew their software was outdated, but put off updating it due to costs. Coupled with leaner operations, this led to disaster for the carrier. 

As I write this in January 2023, it’s unclear how much damage was done to their reputation, but I can’t imagine a scenario where this doesn’t affect the future bottom line in a major way. Thousands of customers will never trust them again. 

Software… we often don’t think about it, but for many companies, it’s their nervous system, and if there’s a glitch, everything is affected. But upgrading software is easy to push aside because it’s usually not a direct profit-generator. Buying a new production machine (or a plane) is both exciting and directly profitable. But upgrading your software… only the IT guys get excited about that – everyone else groans.  

Well, we can’t help you with the excitement part, but there’s a way to get new software without worrying about the non-immediate revenue aspect of it – you can finance it!

Software financing is something that not many companies consider, probably because not too many lenders offer it. But a few do, including us. In fact, we’ve been offering software financing for a LONG time. Did we even finance applications that came on floppy disc? You bet we did! 

Do not let aging software affect your operations in a negative way. It doesn’t have to be “we know we need this, but the budget…”. Spreading a major software purchase over years of monthly payments actually puts it more in line with the “back end” nature of its revenue responsibility. That’s smart business. 
We’re well into the 21^st century – software runs everything. Staying competitive means your backend operations need to be as efficient and modern as your machinery. In short, software matters. Just ask Southwest.  

When I say flexibility, I am talking about a few things. To most people, the obvious things are “financial” in nature – things like finance term, rate, down payment options, payoff at the end of the equipment lease, etc. A solid equipment financing partner should be able to do almost any kind of (reasonable) finance deal that the buyer wishes – if the buyer wants a five year term, it should happen. If they want a seven year term, that (generally) shouldn’t be an issue.

I say things like “reasonable” and “generally” in the preceding because let’s face it; given the choice, we’d all like zero percent spread out over 20 years! But then Fletch starves (and Mrs. Fletch runs off with the paperboy, who’s making way more than me under that zero percent scenario.)

But anyway, financials aside, “flexibility” means a few other things. Like financing “odd” things, such as software. Believe it or not, there are many equipment financing firms that will not finance (or lease) software. But let’s face it – software increasingly is becoming more and more ingrained into what we do. In fact, many businesses simply cannot be run without it – it’s as every bit as important as a machine. Thus, your equipment financing partner should be able/willing to finance software, and any other reasonable product. Even if you don’t sell software, this type of “proven” flexibility means they will likely be able to help you next year when you roll out “the wonder widget” and are looking to offer financing.

Here’s another thing – how about financing used equipment? Some equipment finance companies will, and some won’t. But in the end, your equipment financing partner should be willing to finance good condition used equipment. Now again, you might be saying “big deal – we don’t offer used equipment”, and that may be true… for now. But could that change? Perhaps. But in the end, it’s better to have a partner who’s willing to do these things NOW than get stuck with someone who won’t play ball when you roll out something new.