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SMEs failing to invest in the latest technology

Published on 19th May 2017 - Last update on 19th November 2019

Ensuring that your business contains nothing but the most advanced equipment on the market is something that every SME owner must contend with, and for good reason. With the right tools, technology and equipment, your day-to-day operations can function much more efficiently, staff can refine their work schedules and enhance customer service. Of course, there is still so much your business can achieve, it’s just getting your hands on it.

Digital technology is constantly evolving, adapting to the everyday practices of modern businesses. As such, it should be easing its way into every developing business and becoming an intrinsic aspect on the road to success. Yet sadly, there is still a large section of the SME community that isn’t reaping the benefits of digital technology. This has to change!

Embracing digitalisation with technology 

Going digital can offer your business a lot of perks and benefits that any savvy entrepreneur won’t readily turn their nose up at. The speed, efficiency and ability to connect with wider customer demographics can greatly enhance the prospects of many SME businesses. Just some of the technology your business could be enjoying may include:

• Digital Payment Technology

Customers nowadays have a wide consortium of payment methods to choose from, especially online. With the likes of Apple Pay, Google Wallet, Android Pay and so on, keeping track of payments from your customers has never been simpler. Plus, with the in-built security tools, customers can make secure payments in complete confidence. Just as you would take in-store card payments using Chip & Pin, you can use Electronic Point of Sale (EPOS) software to connect with these numerous payment options. Besides which, if a customer can’t pay using their preferred payment method they’re likely to walk away from a transaction.

• Real-time communication

Maintaining a concise chain of command can be difficult. Ensuring that simple messages get passed around can be just as challenging. That’s why free-to-use apps such as Whatsapp, Skype and Snapchat are so incredibly useful. If you’ve got staff working in different offices, buildings or even other countries, you’ll appreciate the sheer scope of the challenge. Yet with highly effective communications, everything from tracking employees and meeting deadlines to addressing potential issues can be delivered upon much, much, faster.

• Real-time updates

Real-time updates can be a massive boon for many developing businesses. Think of how much time and money your business could save if you could readily track inventory levels, order progressions, employee GPS coordinates and so on? You’d be able to quickly adjust work schedules in order to fit around delivery times, locate members of staff with ease and reduce wasted resources. All of this can be achieved using digital software such as Azuga Fleet tracking, Domo, Fleetio and more!

Breaking down the obstacles

However, as with acquiring any business asset, the main obstacle to overcome has always been the cost. You need access to everything from the relevant hardware and software, plus skilled installation technicians to personal digital assistants (PDAs). For many SME businesses, it usually boils down to two scenarios. Either you haven’t got access to the capital required or lack the inability to remove large sums from your finances without causing immense long-term harm. But this is where Asset Finance can come and ease the strain on your business.

Asset Finance

Asset Finance is a unique and highly specialised finance product that many businesses use in order to secure essential assets without taking chunks out of their capital. With this package, your business can take the cost of a concerned asset and spread it over a length of time, possibly extending as far as 7 years. Plus, depending on the finance product and the equipment involved, it may even be possible to reclaim capital gains tax and VAT too. This is all because Asset Finance is a finance package containing a vast array of alternative business finance products including Leasing Agreements, Hire Purchase solutions, Asset Refinance plans and much, much, more!


Leasing Agreements allow you to simply acquire the use of an asset for a set period or term. Terms can last up to 5 years but could be extended to 7 for exceedingly expensive assets. At no point are you deemed the owner of the asset. As such, depending on the product, the asset involved may or may not appear on your business’ balance sheet. This can be extremely useful for tax efficiency reasons. Rental payments may attract VAT which may be reclaimable on a quarterly basis. Just be certain to consult your business accountant for further information first. In order to make the right decision for your business, it’s vital that you fully understand the two types of lease on offer.

  • Operating: Operating leases are a popular method of temporarily securing the services of vital equipment for a fixed monthly rental, plus interest. Such agreements are designed to cover only a portion of the asset’s working life. Unless you’ve arranged a separate contract with the supplier, you’ll also be responsible for maintaining the equipment. Rental costs are calculated considering the usage of the equipment throughout the contracted period and its future predicted worth at the end of the contract. When the agreement ends you can either, subject to conditions, return the equipment, extend the term or upgrade to the latest model.
  • Finance: Finance leases, on the other hand, cover the majority of the asset’s working life. You’re also entrusted with conducting maintenance, repairs, insurance, registration, admin and so on. Again, you are only securing the usage of the equipment for an agreed term and will be expected to make fixed monthly rental payments. These payments take into account the length of the agreed term and predicted worth of the concerned asset when the agreement expires. Subject to conditions, you’re given a choice at the end of the agreement to either return the asset or continue to lease it for a nominal annual cost as agreed with the lessor.

Hire Purchase

Hire Purchase is a great method of finance for many business owners since it allows you to eventually become the asset’s owner. What’s so attractive about this method of finance is it that allows you to spread the asset’s total cost over a period of time, instead of forcing you to part with a large one-off payment. Hire Purchase solutions work by a financier purchasing the equipment from a supplier on your behalf, then allowing you to use it whilst complying with a fixed monthly repayment scheme. But, before you can use the equipment, you are obligated to first pay an initial deposit.

An initial deposit covers the fully VAT and is usually equal to 10% of the equipment’s total value. However, this is negotiable and could be higher or lower depending on circumstances. In addition, the initial deposit also covers the full VAT associated with the asset, which may be reclaimed on a quarterly basis. As soon as this has been paid, you can begin using the equipment and will start the repayment process. Repayments are calculated over the length of the agreed term and incorporate both capital and interest term. At the end of the term, ownership of the asset is transferred to you providing all repayments have been made.

Asset Refinance

Asset Refinance allows you to unlock the value tied up in any of your existing and unencumbered assets, enabling you to receive a lump sum off the back of them. This is a great way to raise cash for your business without relying on your bank, allowing you to purchase new equipment and fund the installation of digital technology with ease. Technically a type of Secured loan agreement, as the funder takes security in the assets, terms can typically range up to 5 years during which you will be required to complete fixed monthly repayments, plus interest. As such, should your business fall behind in making fixed monthly repayments the finance lender can seize the assets in order to recover the remaining costs. At the end of the term and once the finance has been fully repaid, ownership of the asset is returned to you.

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At Rangewell, our services are clear and transparent. We support a wide range of SME businesses of every shape and size, for finding every type of finance. Follow us on Twitter and LinkedIn for business tips and tricks, and feel free to call us on 0203 637 2340 if you’d like to chat about what we can do for you.

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