The best small business loans for technology
The rate at which businesses have been adopting technology to support their day-to-day operations has probably taken a quantum leap during the pandemic, as companies were forced to rely on remote work and cloud-based applications to keep functioning during lockdowns.
However, the cost associated with implementing these solutions might be less affordable to small companies compared to large enterprises, a situation that is probably forcing business owners to look for small business loans available to secure the funding they need.
If you are currently looking for funding alternatives to embrace this latest acceleration in the digital transformation, the following article will provide you with certain recommendations you can follow when comparing the best small business loans, including the ones offered by Camino Financial.
How important is technology becoming for businesses?
Technology is allowing small businesses to lower their overhead, increase productivity, and protect client’s information – among other things.
Accounting and HR management software is possibly reducing the cost of back-office activities, while project management software has helped managers stay on top of what their teams are doing while they work remotely.
Meanwhile, cybersecurity threats have continued to grow in the past few years. Multiple companies like CrowdStrike have stepped up to offer low-cost cloud-based solutions to help small businesses in keeping their most sensitive data protected from unauthorized access.
According to a study performed by Deloitte in 2018, businesses that implemented digital tools saw a 38% increase in their sales, while 30% cited that they could access more customers in the United States by doing so.
In light of these findings, small companies should probably see the incorporation of technology not just as a way to save costs but also as a potential competitive advantage.
In this regard, the gap between businesses that embrace technological and digital tools and those that fall behind in this effort could widen in the coming years, especially now that the pandemic has possibly prompted a long-lasting surge in online shopping.
Is it profitable to invest in technology?
Different from hard-asset investments, investing in technology means acquiring an intangible asset that may or may not produce an immediate return in the form of higher revenues or cost savings.
This is perhaps the reason why business owners tend to postpone technological investments as they feel they are not worth the money.
However, there are multiple ways in which you can analyze if a certain technological investment is worth the trouble.
First, you should analyze the impact that the implementation of the solution will have on the amount of effort your staff puts into completing an assignment. The hours saved by the incorporation of such a tool can be quantified to analyze its economic benefits.
Meanwhile, if your clients will be the ones to benefit the most from it, you could analyze the potential impact that higher levels of customer loyalty could have on your top-line results.
Finally, when it comes to solutions that facilitate remote working, you could assess the amount of money that you will be saving on rent and office equipment by allowing your staff to work from home.
How to identify the best small business loans?
Since the savings or earnings obtained from implementing new technologies on your business can take some time to start flowing, loans for technology will usually offer above-average repayment periods – possibly ranging from 36 to 60 months.
Meanwhile, if you are looking to invest in hardware, certain lenders can extend you a business equipment loan. These loans typically offer a more competitive interest rate as they use the equipment as collateral to lower the appraised risk of the loan.
Finally, you should make sure that the loan amount covers not just the purchase of the equipment or solution but also any installation costs, training, and other indirect costs that could typically increase the bill.
Technology has possibly become more important than ever for companies as consumers have grown aware of the benefits that the digital era could represent for their wallets.
Therefore, investing in technology should not be seen as an option but rather as an obligation in order to survive and thrive in today’s modern economy.