Tips for financing business electronics purchases

Businesses are reliant on electronics, even if it doesn’t seem like it. Almost every business transaction is electronic, as are our processes and production functionality.

Recent global semiconductor shortages caused prices of electronics, especially computer components such as graphics processing units (graphics cards), to skyrocket. With emerging technologies such as 5G and Internet of Things or Edge computing now becoming commonplace, our businesses must innovate, or risk being left behind.

What are your objectives?

It’s important at this stage to understand your business objectives. Are you looking to increase productivity? Will new equipment give you the edge over competitors? Can you upgrade instead of replace what you have? This can all feed into a technology roadmap.

Build a technology roadmap

A technology roadmap is a planning tool that helps carve out your business objectives to long- and short-term technology solutions that are available on the market. To begin with, you may want to use cloud infrastructure but move later to an in-house solution to gain granular control with certain business functionalities.

Assess what needs replacing or upgrading

If your business workstation PCs aren’t running graphical- or data-intensive workflows but still feature mechanical hard drives, it may be worth transitioning them to solid-state drives (SSDs) for a massive performance upgrade. If you are running AI or data analysis applications, new workstation GPUs should be paired with current CPUs to avoid computational bottlenecks.

Long-term assets need long-term finance

No matter whether inflation is rampant or interest rates are low, every business needs adequate cashflow. According to ASIC, 46% of businesses fail due to poor financial management. Knowing the numbers and maintaining cashflow prevents your business from becoming another statistic. One of the biggest mistakes in business is mixing long-term liabilities (loans and funding) with purchasing short-term assets (inventory or raw materials, for example.). If you plan to use workstations or routers for five years, it makes sense to take out a loan for equivalent amount of time.

When electronics fail and are urgent for business continuity

Electronics can, and will, fail. In a pinch, applying for a secured business loan can take time. However, by considering a caveat loan you can get cash flowing while funding immediate purchases of electronics you need to keep your business going. Caveat loans can be scaled up from as little as $50,000 all the way up to $1 million, depending on your business turnover and revenue expectations. This can assist with electronics failures that could disrupt productivity or business continuity. Another tip is to approach a specialist broker which can find many different loans from various lenders instead of sticking to your main business bank, as they could provide additional flexibility or more competitive rates.

Remember software and training

In any electronics purchase you should also factor in software — especially ongoing costs such as software as a service (SaaS) and training staff so they’re up to speed with new functionalities and how to perform basic troubleshooting. This may be an overhead but can greatly reduce reliance on off-site managed services who may take time to respond.

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