Software as a Service (SaaS) models of software deployment have become increasingly popular over the past few years.  As businesses have shifted to the understanding that business processes and proprietary data are what matters, computing itself has become a commodity – no longer guarded jealously as strategic advantage.  Web systems have proven themselves reliable and secure, and employees are familiar with web interfaces and application conventions.  More and more, small businesses are realizing that the economies of scale offered by SaaS solutions can offer better, cheaper, more reliable applications than companies can themselves.

Other benefits of SaaS software may include centralized feature updating, faster releases of new features and the ability to maximize efficiency of corporate licenses.  New versions can be released centrally, avoiding the hassle of expecting employees to maintain updates and service releases.  Multiple licenses for employees who use more than one computer (a desktop and home laptop, for example) can be rolled into a single, user license in some cases.  Providers of SaaS pass on improvements to all their clients and are motivated to improve their product.

Financial benefit to a business adopting Software as a Service models comes in the form of reducing IT overhead costs (salary, benefits, physical space) and in reducing up-front expense of software purchases.  On-demand pricing from hosting service providers provides the flexibility for software to become a variable expense, rather than a fixed cost at time of purchase.  Small businesses can reduce the cost of End User License Agreements by licensing only the devices and numbers needed.

Software as a Service models are not without risk.  A business that places dependencies on an external provider puts themselves in the trust of a provider that could fail or perform poorly.  Businesses that are built on innovative or highly specialized niche processes may not be good candidates for SaaS solutions.  Bandwidth may become an issue if internet speeds are not acceptable for the work needed.  Once a small business has decided that SaaS is the way to go, there can still be substantial implementation costs, or large annual up-front costs.  Most traditional lenders do not offer software financing for SaaS.

Funding District understands the benefits of SaaS to small businesses.  There are only a handful of lenders that will consider structuring software financing for SaaS, and we have relationships with those lenders that also get it.

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