Many companies can and will pay cash for an entire implementation of a business software package like Microsoft Dynamics® GP, one or more extensions like PanatrackerGP and the associated hardware like barcode scanners and printers. That may be cash from their own accounts or from an existing line of credit. They may also consider a lease arrangement directly through their software vendor.
Regardless, these sources of software project funding pose a number of problems. Consuming existing lines of credit reduces the line of credit on hand for operating expenses. Even if it seems like there is adequate borrowing capacity for business operations, what if an acquisition opportunity arises, or there is a disruption in the business that creates increased demand for cash? A company may reduce its readiness to adapt to change by committing its line of credit.
Additionally, a bank may typically only lend money for specific parts of the project cost, often a 60/40 percent split of hardware to software. They will generally not finance the various soft costs associated with the project including implementation, consulting … (download to read more)
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