When a small to medium sized business considers developing custom software, there are many factors to consider.  With the availability of thousands of OTS (off the shelf) products to choose from, managers must evaluate more than return-on-investment (ROI) calculations.  In addition to the cost and availability of financing for custom software, the business must also consider whether the risk of a custom solution is offset by creating a truly unique product the business can offer its customers.  This is often difficult to quantify in dollars.

Situations where custom software makes the most business sense might include:

• A need to integrate several existing systems
• Partnerships and frontline applications that demand features not available in OTS products
• Cost of implementing OTS alternatives, which can be as expensive as developing a custom product that would better suit business needs
• Creative and unique management practices that need custom automation

To successfully evaluate the decision to tackle a custom software solution, an honest look at the risks and motivations for a custom software project must be undertaken.  Ongoing maintenance of a custom system must be included in the considerations.  Technical dependencies change rapidly.  A lasting solution must keep up.  Business decisions must drive technology rather than the reverse.  A well-researched decision will include an understanding of the OTS options and avoid developing expensive technology just for the sake of “being different.”

Once a business has decided that having software developed is truly the best solution to leverage its unique competitive advantage, it is then often difficult to secure financing for the project.  Because custom software is unique to a specific business, by definition, it has little resale value. Despite its potential long-term financial value to the business, traditional financing venues are often not available for custom development.  Small businesses must pursue new, innovative paths to finance the custom software that will bring unique products to market.

Funding District has key relationships with a select number of lenders that will consider all types of custom software financing.  Specialized lenders understand that if the software is critical to business operations, it has significant value.  With the right financing solution, customized systems don’t have to be limited to large and already well-funded organizations.  Small businesses can compete with unique systems that generate more long-term value than OTS products.  Funding District provides access to these innovative lenders.

For consideration, please fill out the following Software Financing Application and fax to our office at 913-562-5699.