How Financing Helps As-a-Service Businesses Invest in Technology and Innovation
Automation, robotics, artificial intelligence, robotics, 3-D printing…The list of advanced technologies and innovative uses grows daily. Investing in technology and innovation can be critical for businesses to remain competitive, meet customer demand and control costs.
But at the rate technology changes, how can a business keep up?
How as-a-service financing works for end users
Enter as-a-service financing. For end users, as-a-service financing provides a way to purchase technology without a large upfront investment. A supplier provides a service (or product with associated service) on a non-ownership basis, typically via a subscription payment plan. This allows the customer – the user – to access new, different, innovative technologies on a regular basis without making a large investment. This “innovation funding” allows them to stay up to date with the latest advances in hardware and software, increase flexibility, and improve their ability to respond to changing market demands.
How as-a-service financing works for technology providers
If your business sells technology – hardware, software and/or services – to end users, or to distributors, it’s essential that you can offer the latest in-demand products and services. That’s no easy task for products and services that are typically expensive and complex – and which you must buy upfront to have when your customers need them.
An as-a-service financial model can help you grow and thrive in this kind of environment. With an as-a-service model in place, you can purchase what you need and then provide it to your customers on a subscription basis. Think of it as renting or leasing your products and/or services to customers.
A strong financing partner experienced in as-a-service models can create a customized financing program to help you purchase the equipment you need to meet customers’ wants and needs. The model reduces – or removes – upfront front capital requirements, providing the cash infusion you need for your technology investment.
Establishing as-a-service financing for customers
The same partner can also help you set up an as-a-service payment model with your customers if you don’t already have one in place. Selling via a monthly payment can help you become more competitive – and help avoid the potential risk of discounting equipment to sell on a traditional-purchase basis.
In many cases, a financing provider can even set up and run the as-a-service program. This often eases the logistics of operating the program while making day-to-day business seamless and even more efficient for customers.
Benefits of operating as an as-a-service business
When you run your business on a subscription, or as-a-service, basis, you’ll be joining the ranks of managed service providers around the world. In shifting the customer-supplier relationship from a traditional model of ownership to one focused on providing value to customers on an ongoing basis, as-a-service contracts accrue significant benefits.
- Stay up to date with current technology and innovations
- Reduce or eliminate upfront expenditures
- Improve cash-flow predictability
- Simplify purchase agreements
Mitsubishi HC Capital America is a commercial finance company that provides customized solutions to help organizations of all sizes accelerate growth. Our experts throughout North America provide comprehensive financing solutions that include as-a-service and other finance-forward programs. If you want to learn how innovative financing could help your as-a-service business invest in technology and innovation, contact us.