Why You Need a Software Financing Partner

Benefits of a Software Vendor Partner
Benefits of a Software Vendor Partner

Why You Need a Software Financing Partner

Many small and medium businesses desperately need new software and subscription services; however, they lack the capital and cash to purchase everything they need to run their company successfully upfront. Unfortunately for software vendors, this means that you are missing out on valuable opportunities to get your product and services into the hands of business owners everywhere.

What you may not realize is the solution to marketing your product to every business owner is to offer financing. Allowing your customers and clients to order, install, and maintain the subscription software while making monthly payments will encourage more consumers to purchase and use your software.

As a business owner, you’re probably thinking, “I don’t have the money or capital to just allow my product to walk out the door without it being paid in full.”

Every business owner asks that same question and what you might not know is that there are funding groups available who can be your subscription software financing partner and solve that problem.

The Benefits of Partnering with a Software Financing Vendor

There are many more benefits to partnering with a financing company beyond the ability to get your product into more consumer’s hands. When you partner with a financing company, you will see your profits shoot up. Customers will be more interested in your software knowing they can make monthly payments rather than having to save up hundreds or thousands of dollars for subscriptions and software. When you allow financing of your product through a financing company, the payment to your company is still the full price of the software. The payment will just come from your funding partner rather than the customer.

These monetary perks are exceptionally useful amidst global pandemics and economic downturn when businesses are struggling for cashflow and working capital. However, some financing partners, like Dimension Funding, offer a lot more perks as well including tailored marketing services.

Here are a few of the marketing services that we offer…

Co-branded Landing Pages – We create tailored landing pages on the Dimension Funding website that offer financing promotions to your prospects based on their unique needs. You get a personalized link to distribute to your prospects offering financing and co-branded with your logo, information and value proposition. We work with you to offer promotions that will engage your prospects and turn them into sales. Work with our marketing department or your account manager to put together landing pages that will promote your products and offer financing options that makes sense for your customers.

Advertising Flyers / Datasheets – We design co-branded flyers or datasheets in PDF format for your use in turning prospects into sales. We offer special promotions to your prospects designed to meet the needs of your prospects. We create professionally designed flyers and datasheets for your use to give to prospects and customers that offer financing promotions, special offers and the benefits of financing that eliminates a large cash outlay and saves working capital.

Email Marketing – Dimension Funding will help you with email marketing and messaging that will get a better response from your prospects. We may be able to expand your reach with email marketing ideas and concepts that will engage prospects.

Exclusive Offers – Be the first to be able to offer discounts and special financing offers to your prospects and customers. By offering financing promotions designed for your customers, you can turn more prospects into customers and close more deals.

Custom Promotions – Just for your Prospects If you have an idea for a custom financing program tailored to your prospects, we will work with you to put it together. There are limitations on what is available but within those limitations, we can create personalized promotions for your prospects and customers that will generate more sales. Customized promotions can also help to close many deals instead of the prospect going dark.

White Papers / Literature – Work with Dimension Funding to create White Papers, Blog Posts or other Literature that can be used to generate more prospects. We will promote these on social media, in our quarterly newsletter and in our email-marketing reaching many thousands of prospects.

Social Media – As a preferred vendor in our vendor partner program, we will work with you to create cobranded LinkedIn posts and other social media posts to get you in front of an expanded audience and engage your current LinkedIn audience with messaging that will generate more interest and leads.

Dimension Funding will also work with you to generate sales and increase your leads by adding valuable widgets to your website such as a financing tool that allows customers to apply for financing directly online through your site without having to speak to anyone.  A payment calculator is another option that Dimension Funding can add to your site as well as a mobile app that allows you to get financing information from their iPhones.

Who would have thought that your subscription financing vendor could also serve as your marketing partner? Dimension Funding is the partner you are looking for to grow your business through offering innovative solutions to financing to your customers and clients that also address your marketing needs.

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What the Future of the Construction Equipment Industry Looks Like for 2021

Construction Equipment
Construction Equipment

What the Future of the Construction Equipment Industry Looks Like for 2021

With new developments taking place more frequently, the evergreen construction industry looks more promising than ever.

It’s important for manufacturers and vendors to understand the trajectory of this projected growth so that they can ensure their processes and end product reflect these changes favorably.

In this article, we’ll do exactly that. You’ll understand the reasons for expected growth, what areas of construction are doing well, what construction equipment is in high demand, and the impact of COVID 19 on the industry and manufacturers as a whole. 

Reasons for Construction Industry Projected Growth

According to statistics and market growth patterns, the global construction equipment market is expected to expand at a 4% annual growth rate in the next decade. This is despite a literal and proverbial roadblock in the form of a global pandemic.

There are a number of reasons that could potentially contribute to this projected increase:

  • Renovations and uplifts of old buildings is an increasingly popular development process employed by many countries. Tourism greatly benefits from well-maintained landmarks and historic sites which is why governments and agencies are willing to put a lot of money and effort into these uplifts. Some construction companies and equipment are specifically designed for this job alone.
  • Governments’ efforts to continuously build roads, railways and highways help drive sales and continuous growth.
  • The advent of new technologies like AI and IoT will make machines more capable and as a result, their services and the people who make them will experience an uptick in demand.
  • New businesses and avenues are created all the time, and many of the renovations, offices, buildings, and factories require the use of heavy-duty construction equipment.

These reasons are very general, of course, and there could very well be others that contribute to the growth, but the majority of it will be driven by the factors outlined above.

What Areas of Construction Are Doing Well?

If vendors understand what areas of construction will perform well in the future, they can model their production or rentals to reflect this. All construction projects are usually divided into either private or state procedures.

Private construction projects are the main contributors to general overall construction volume as many multinational companies have big ideas and even bigger budgets. Let’s take a look at some in demand private construction avenues.

  • Residential Construction – The demand for every type of housing is continuing to rise exponentially. Developed parts of cities have a need to make increased houses and apartment complexes for residents while less developed cities require construction equipment and services even more pressingly.
  • Commercial Construction – Buildings or similar structures created for commercial purposes fall in this category. There are a huge variety of opportunities in this segment which includes skyscrapers, grocery stores, shopping centers, private hospitals, private schools, etc. As overall global spending power increases, the demand for recreational buildings or even office spaces will continue to rise along with it.
  • Industrial Construction – This is a more niche segment of the general construction industry and because of the huge capital required for execution, isn’t very easy to work on. Industrial construction includes projects like power plants, manufacturing plants, factories, solar wind farms, etc. Though they might not be as executable as commercial or residential construction, the demand for bigger industrial projects is still high as industries have to keep their production processes updated which necessitates constant expansion and upgrades.
  • State Construction Projects – Projects that are commissioned or executed by a county, city, government board, or any other state-funded entity fall into this category. Railways, dams, highways, and airports are a good example. While the demand for such construction in developed economies like the US is fair, the demand in developing economies is huge. As these countries progress, they will require better infrastructure for their residents and the demand for construction equipment will rise along with this.

What Construction Equipment Is in High Demand?

Each project type requires specific equipment and procedures for execution but there are general pieces that are always relevant and needed. If you’re an equipment manufacturer then specializing or at least including one or all of these in your production will be a very fruitful investment:

  • Excavators
  • Loaders
  • Bulldozers
  • Concrete mixers
  • Scrapers
  • Dump Trucks
  • Forklifts
  • Graders
  • Cranes (mobile, crawler, tower, etc.)

Besides these all-stars of construction equipment, it might also be a good idea to look at some emerging technologies in the field.

Developments in remote-controlled equipment, connected machines, autonomous vehicles, and electronic power supplies are very promising.

Adapting or at least researching such developments could prove to be incredibly beneficial in the coming decade, especially for construction equipment vendors who want to stay on top of the competition.

How Does This Growth and the COVID 19 Pandemic Impact Small Construction Companies?

An increase in demand for construction will obviously increase the demand for the construction equipment required to carry out the construction too. Manufacturers would have their hands full and the growth rate for the industry as a whole is very promising and encouraging. At least it was until the COVID-19 pandemic started.

There is no question that the outbreak of the Coronavirus has hurt the industry significantly. Social distancing makes construction of any kind almost impossible to carry out and with less consumption happening throughout the economy, many corporate projects in the pipeline have either been postponed or discarded.

While this is a difficult time and situation for everyone, it’s important to realize that like all tough things, this will pass sooner than we may think. Sticking through this turbulent period could yield huge results. After a recession like the one we’re going through, economic boom and growth are almost inevitable.

When this happens, the demand for construction projects and equipment will skyrocket. This isn’t just wishful thinking as analysts and experts are echoing the same sentiments. The time period is still a little confusing, but the upside is certainly one worth waiting for.

If you’re interested in financing your construction equipment through a third-party vendor, be sure to contact Dimension Funding. You’re only an online application and a quick approval process away from getting a time tested, hassle-free, and convenient financing option for your next equipment upgrade.

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The 5 Best Apps for Businesses in 2021

Business Technology Apps for 2021
Business Technology Apps for 2021

The 5 Best Apps for Businesses in 2021

Technology has revolutionized the way we do business and has helped us intuitively manage the day-to-day tasks associated with it. Developers are constantly working to make better, more useful tools to aid the ever-increasing number of entrepreneurs in their pursuit of excellence.

In this article, we’ll show you the 6 best apps you should be using for your business. For each one of our choices, we’ll detail their benefits and how you can take advantage of them.

Some might be familiar to you, others might be new, but all of them will definitely help supercharge your workflow!

Evernote

No best business apps guide could ever be complete without Evernote. A juggernaut in the industry with a legion of loyal customers and overwhelmingly positive ratings, Evernote helps you reduce your businesses’ reliance on paper, and allows you to collaborate and share ideas with your team members quickly and efficiently.

One of the best features of this robust app is the fact that it is tightly integrated with almost every service you can think of. This allows you to fit it into your workflow super easily with no chances of compatibility being an issue. You can save all your important documents and ideas in the app, which will then sync it to your team members and the other devices you use on a day-to-day basis.

Some other notable features include an incredibly sophisticated search tool, templates for to-do lists and notes, sketching capabilities and stylus support, and much more. Trying to list all the reasons you should use Evernote would be a huge undertaking in and of itself, but you can get a good idea of the benefits from this article.

Evernote is free for the basic version, while the Plus version requires a modest annual subscription.

Expensify

An incredibly popular tool known for its unique feature set and intuitive functions, Expensify is a must-have in your business tool arsenal. It allows business owners to easily track their employee’s work-related expenses by logging them into the app.

Expensify lets you upload receipts using any android or iOS device. They have other options too which include OCR smart scan, uploading a picture on their official website, or even using a Google Chrome extension. The app then records all this data for you making end of year reports and analysis that much easier.

With a great drag and drop interface, and the ability to extract images from receipts for expense reports, Expensify is a great tracking tool for small business owners. While it may not be as densely packed as other finance trackers, it does what it was created for reliably without fail. Best of all, it’s free for you to try.

Google Workspace

The Google Suite of productivity apps includes Gmail, Google Docs, Google Sheets, Google Slides, and more. These apps might not be as popular as their Microsoft counterparts, but they have an advantage that is quite simply unmatched. Using Google’s exceptional cloud storage software, these apps sync and update their content better than any other service on the market.

This makes real-time collaboration incredibly simple and intuitive with easy options to edit documents and text files on the go. As the apps are all internet-based, you can access them from anywhere with any device as long as you have a decent connection.

The basic version is completely free to use and only requires your Google id to sign in; a great option for small businesses that only need a couple of people to collaborate together. There are other subscription-based options for you to choose from if your needs are more intensive. You can find them all here.

Asana

Asana is a feature-packed project management app that is designed to keep your team members focused on the task at hand. Most project management software solutions are very complex with cluttered interfaces and settings but Asana is the complete opposite.

The app uses “boards” to intuitively follow the progress of any project and to delegate tasks between team members. The visual representation is easy to follow and with options to share notes, files, and deadlines within the app itself, the chances of missing targets or miscalculating are greatly reduced.

It also offers plenty of useful integrations with larger, more popular programs like Google Drive, Dropbox, etc, all of which help to make it the complete project management package. The app is free to use as a basic service with an option for subscription-based upgrades if you want everything.

Canva

It might surprise you to find a graphic design app on this list, but the benefits that Canva provides, especially for businesses that don’t have an in-house designer, are massive. Canva is a tool loaded with easy-to-use features and amazing functionality to create engaging content that is easy to share.

Perfect for businesses looking to level up their social media game, Canva has a plethora of templates for them to choose from. Instagram posts, social media banners, marketing materials, presentations, ads, and posters can all be designed within the app itself.

With social media becoming more and more important, having a strong presence is a necessity for businesses looking to take things to the next level and Canva might just help you do exactly that. The basic app is free to use with more advanced features available to unlock should you need them.

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Take Advantage of IRS Section 179 Before the End of 2020

Reduce your 2020 taxes
Reduce your 2020 taxes

Take Advantage of IRS Section 179 Before the End of 2020

As 2020 draws to a close, businesses all over the world are taking the time to reflect on the turbulent year, are making any last-minute changes to their plans, and are deciding the basis of the coming year’s procedures.

One thing you should start considering if you haven’t before this point is taking advantage of the IRS Section 179 tax deductions. This law gives you an incredibly affordable opportunity to finance your equipment upgrades or any other renovations you may have been planning.

The deadline to benefit from this is fast approaching though and the sooner you understand Section 179, the sooner you can make the best possible long-term decision for your business.

IRS Section 179 Explained

In a nutshell, Section 179 of the IRS tax code is an incentive formulated by the US Government that is specifically designed to encourage small businesses to increase their spending. This spending could be in the form of upgrading existing equipment as an example or implementing a new industrial workflow through updated machinery.

Section 179 does this by deducting the full purchase price of qualifying equipment or software bought during the tax year. This would allow companies to deduct the full price from their gross income as this expense would be considered a tax write off.

Specifics You Need to Know

To take advantage of this, the equipment you’re looking to purchase has to be eligible, and said equipment has to be bought and put to use BEFORE midnight on December 31st, 2020. There are also spending caps in place, mainly a:

  • $1,040,000 deduction limit
  • $2,590,000 spending cap.

The equipment you’re financing has to fall in one of the following categories to be eligible for Section 179:

Eligible for Section 179

  • Hardware (machinery, robots, computers, etc.)
  • Furniture
  • Vehicles designed for commercial usage (shuttle vans, cargo vans, trailers, etc.)
  • Off the shelf software
  • Property that is not a part of the building’s structure
  • Certain non-residential building renovations (roofing, alarms, fire systems, etc.)

Unfortunately, you cannot at this point in time take advantage of Section 179 tax deductions if your planned equipment upgrade falls into the following categories:

Ineligible

  • Property (permanent buildings, structures, swimming pools, parking areas, etc.)
  • Property being used or upgraded outside the US
  • Property used for the purpose of furnishing lodging
  • Property inherited or taken as a gift
  • Any property that does not fall into the category of personal property

The Benefits for Your Business

As Section 179 was passed in the hopes of bolstering general economic activity, it’s no surprise that many businesses will find the law quite helpful. A problem that plagues companies, especially the ones that operate at a smaller scale, is finding the resources to upgrade or automate their production processes and software.

These upgrades are very rarely affordable which is why many businesses have to continue to use older, unreliable equipment to carry out their production in the hopes of keeping their overall spending and costs down. This law changes all this. The IRS Section 179 tax deductions help alleviate a lot of the burden business owners face when making these tough decisions. Potential upgrades that may have been in the pipeline for years, can finally become a reality.

Better equipment will allow businesses to produce more products at a better quality and a lower price. It might also allow them to try newer, more innovative production methods to give their consumers an incredible product that helps their bottom-line and develops brand loyalty. All these factors play a big part in achieving economies of scale; a goal most businesses are actively striving towards achieving.

Next Steps

Now that you know all about the IRS Section 179 tax deductions, it’s time to understand the next steps on what you have to do.

The most important thing is making sure your upgrade is eligible and then acknowledging the December 31st deadline we’ve outlined before. As the month is almost drawing to a close, time is short and you will have to act fast if you’re still interested in your business benefiting from this law for 2020.

To claim the Section 179 deduction, you have to specify this on Part 1 of Form 4562. Include a description of the property, its cost, and the overall amount of Section 179 you’re claiming on this asset on Line 6. A list might also be attached in case you need more room.

If you’re unwilling or unqualified to fill this out, then it’s probably a good idea to hire an accountant to do this for you.

In terms of gathering funds, you can choose any financing option for your equipment upgrades and the Section 179 deduction would comply with almost all of them. This includes private financing companies like Dimension Funding. Choosing to finance your industrial automation upgrade through private financing companies like Dimension Funding has a myriad of benefits that banks and other lenders simply can’t provide.

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4 Tips to Get Your Business Ready for Year-End

Get your business ready for 2021
Get your business ready for 2021

4 Tips to Get Your Business Ready for Year-End

Business owners must be extra vigilant as the year ends for one simple reason: Being smart and planning carefully at this time can give you a huge head start on your competition and could make the difference between you succeeding in the new year or failing.

1. Plan for the Next Year

Prior Planning Prevents Poor Performance. The military swears by this idea and there’s no reason that businesses shouldn’t internalize this concept too. The better you plan, the lesser the chances of your strategies failing or not yielding positive results.

A great way to start this planning process is to look at the current year and analyze if the goals you set at the start of it have been met or not. If not, then why? Investigate and try to find cues on what you should have done better. The more you research and dig, the better you’ll understand your failures and successes.

Customer testimonials, financial reports, employee feedback, are all ways that can help you better discern your business operations and the next steps you need to take to improve on them. It’s important to be very honest and proactive here. Making a wrong call or miscalculating a strategic step could result in a catastrophically bad new year for you.

Use all this information to get your business organized and create new goals for the next year while updating and modifying existing ones.

2. Sort Out Your Accounts and Finances

While easily the least glamorous part of owning a business, finances are the lifeblood of your day-to-day operations. The end of the year is a great time to sort of the essential tasks every business owner has on their to do list. Whether you do these yourself or delegate to an accounting professional, it’s super important that you make certain statements a priority to better understand your business’s financial performance.

The following reports should be emphasized:

  • Profit and Loss Statement – P and L’s, also known as income statements, document your businesses’ revenues, expenses, and overall costs during a particular period of time; the end of year income statement would obviously consist of that entire year’s finances.
  • Cash Flow Statement – This useful analysis tool reveals how a business manages its funds. It includes information on how changes in the company’s assets and liabilities affect cash flow and cash equivalents.
  • Balance Sheet – An overview of a company’s assets and liabilities which includes any amounts owed to investors or lenders.

These reports must be the basis of most of your decision making and you should plan according to the positive or negative results they reveal.

3. File Your Taxes and Take Advantage of IRS Section 179

Just like sorting out your finances at the end of the year, taxes are another important, yet tedious task business owners have to do. No matter how annoying, filing taxes on time is important if you want to avoid late filing fees.

Besides just getting your tax documents in order, this is also a good time to finance your equipment upgrades by taking advantage of IRS Section 179 tax deduction. This law allows businesses the opportunity to deduct the cost of qualified equipment purchases during that tax year as a business expense.

Lower taxes lessen the burden of the upgrade allowing more businesses who might not be able to afford expensive equipment, the opportunity to update their processes. Some important things you should know about IRS Section 179:

  • There are spending caps ($1,04,000 deduction limit and a $2,590,000 spending limit), so it might not be a viable solution if your scale of production or operation is quite large. However, Bonus Depreciation is likely to take care of purchases over the Section 179 limits.
  • Only qualified equipment can take advantage of IRS Section 179. If your upgrades are related to renovating buildings or property, then you might not be able to take advantage of the tax deductions.
  • Your upgrade MUST be bought and put into action by midnight of December 31st, 2020.

The last point is particularly important as you have to act fast if you want tax free equipment upgrades for your business especially now that 2020 is drawing to a close.

4. Focus on Improving Employee Performance

Employees are the backbone of any good business and while analyzing your finances and tax impacts are important, your staff performance also requires some introspection. Talk to your staff and ask for their feedback on their grievances and the things they want to change or improve upon.

Likewise, take this time to give your own feedback to them on what they should do to improve their performance. This allows every team member to know exactly where they stand and what they need to work on in the coming year. A company that wants to constantly improve can never leave out their workforce as they are the ones who will be carrying your company name forward.

Keep everyone on the same page and you will avoid employment disputes and quarrels in the coming year. As a bonus, this is also a great time to plan some morale-boosting events like Christmas parties but due to the Coronavirus pandemic, this particular strategy should be postponed for 2021.

Conclusion

We hope these tips give you some ideas on what to implement or look into at the end of the 2020 business year. It’s not how you start but how you finish that impacts your longevity in this game, and with 2021 just around the corner, your business has a great chance of reaching the success you aspire towards.

 

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Top 5 Benefits of Financing your Industrial Automation Upgrade

Benefits of Financing Industrial Automation Upgrades
Benefits of Financing Industrial Automation Upgrades

Top 5 Benefits of Financing your Industrial Automation Upgrade

Industrial Automation is the future and incorporating it into your manufacturing workflow is an absolute necessity in today’s business climate. While the evolution of robots and specifically calibrated machinery has changed our production processes and methodologies for the better, it comes at a significant monetary cost.

The most difficult part of adopting and benefiting from industrial automation is getting hold of the machinery itself. There are a myriad of financing options available for you to choose from and an even wider range of vendors offering their services. Trying to make the best decision for your company and your finances can become difficult for this very reason.

You can go to a bank and ask them to finance your upgrades, but your credit score and history will play a huge role in this acquisition. Smaller businesses in particular might find banks reluctant to invest in this steep upfront cost for them, which is where private financing companies like Dimension Funding come in.

Most of the time, in situations like this, financing your industrial automation upgrades will be your best bet – regardless of the size of your business or the equipment you’re looking to have installed. 

Here are 4 reasons why. 

1. Only Purchased Industrial Automation Equipment Is Used as Collateral

A problem with financing through bank loans is that the bank lending the money will require a “blanket UCC lien.” This allows the bank to take all the assets of your company as a security for the financed equipment. It grants them the legal right to seize these assets in the event of nonpayment. Banks do this as an extra peace of mind to ensure you pay up, but it lessens your position and is undeniably a big liability.

Private financing companies on the other hand do not require a “blanket lien.” In fact, many only require the equipment being financed to be used as a security instead of everything you own. This keeps you in control and minimizes huge losses in case of non-payment.

2. All Industrial Automation Upgrade Expenses Are Taken into Account

Another problem with financing your industrial automation upgrade through banks is the fact that they don’t cover soft costs like installing the equipment, transporting the equipment, and maintaining it in the long run. These are all expenses that you are expected to pay on your own and can come as an unpleasant surprise after already agreeing to pay a large sum of money for the equipment itself.

If you finance your upgrades privately, however, all these expenses are accounted for and included in your principal amount. This minimizes any sudden or unexpected costs and gives you the full picture of what you’re actually paying for. Better awareness of what you pay allows you to plan better and allocate those funds for more important things in your business.

3. Fixed Monthly Payments

Private financing companies like Dimension Funding offer yet another advantage when compared to conventional bank loans. Banks usually prefer to loan money on a floating or a variable rate of interest which results in irregular monthly payments. Besides the inconvenience of having to constantly stay updated with these payments, it makes it more difficult to plan and allocate financial resources efficiently.

Privately financing your company’s industrial automation through a third-party company means that you will pay a fixed monthly payment for the entire duration of the automation equipment’s decided term. There are no unpleasant changes in interest rates and no hindrances in planning for where to invest more resources in the future. This allows you to treat your payments like a consistent monthly cost. One that is easy to account and plan for.

4. Easy Application and Approval Process

The process of applying for and getting approved for private financing is more streamlined than it has ever been.

You can apply for up to $250k without providing financial statements (some restrictions apply) and if you require a larger package, a hassle-free paperwork process makes that easy too. The application is online and after you apply, the approval process can take as little as a few short hours. It’s that easy! Compare this with the mountain of paperwork required for bank loans and the associated uncertainty and lack of transparency. Private financing is a clear winner.

Next Steps

Financial decisions like deciding to incorporate industrial automation into your production flow have the potential of either taking your business to the next level or crippling your work and efforts. Making the most beneficial choice of how and where to receive this financing is a multi-faceted problem that requires you to look at your individual needs, your budgets, and what you value as a company.

If you’re interested in learning more about financing your company’s equipment through a third-party vendor for all the reasons we’ve outlined and more, be sure to contact Dimension Funding to get a head start on your approval process.

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How Investing in Software, Equipment and Tech Can Save Money on Your Business Taxes

Save on your Business Taxes by Investing in technology
Save on your Business Taxes by Investing in technology

How Investing in Software, Equipment and Tech Can Save Money on Your Business Taxes

In addition to the purchase of equipment and assets for your business, the purchase of software can be written off on your business taxes. One of the biggest write-offs comes from taking advantage of IRS Section 179. You can write off up to $1,040,000 under IRS Section 179 for equipment, software and tangible personal property with a spending cap of $2,590,000. Anything not covered by IRS Section 179 can be written off under Bonus Depreciation.

Another area for your tax accountant to explore are tax breaks under the CARES Act passed in March of 2020 to help businesses survive during the measures taken to get the pandemic under control.

What Is Section 179 of the Tax Code?

Section 179 of the IRS Tax Code is for small and mid-sized businesses that purchase equipment, which includes software, during the qualifying year. The deduction under Section 179 allows for the full amount paid or financed during the tax year to be taken. To claim this deduction, businesses need to fill out form 4562 Part 1 and attach the form to your standard business tax filing. The deduction is not automatic so ensuring you have the correct forms is vital to getting the tax credit you deserve.

The best part of Section 179 is that other technology you invest in this year qualifies for this deduction including:

  • Machinery and business equipment
  • Business vehicles and fleets
  • Computers
  • Retail software
  • Office furniture and equipment
  • Property
  • Improvements to commercial buildings such as upgraded security alarms, HVAC, roofs, or fire systems
  • Tangible personal property

What is tangible personal property?

Tangible personal property includes personal computers that you take between home and the office but that are used for business, your personal office equipment, and other property that you own personally but is used for business solely. The property also has to last more than one year.

Some specific items that cannot be deducted using Section 179 include:

  • Land
  • Inventory
  • Permanent structures attached to land such as fences, paved parking lots, swimming pools, courtyards, or driveways
  • Property being used outside of the U.S.
  • Intangible property such as patents, trademarks, and copyrights

Another great thing about the Section 179 Tax Deduction is that even used equipment, machinery, furniture, etc., that you purchase that year is considered a new purchase under the code. To make a claim on your 2020 taxes, the equipment or software must be purchased or financed, installed, and be used between January 1, 2020 and December 31, 2020.

Bonus Depreciation

If your purchase exceeds the IRS Section 179 spending cap of $2,590,000, you can still write off the remaining amount under Bonus Depreciation. The amount over the spending cap reduces the Section 179 depreciation amount dollar for dollar. However, the amount of the purchase not covered by Section 179 is still covered under Bonus Depreciation. Consult your tax professional to ensure that any purchase is covered by IRS Section 179 and/or Bonus Depreciation.

Other 2020 Tax Breaks Your Small Business Needs to Know

One of the biggest tax benefits of 2020 for small businesses comes from the CARES Act that was passed in March of 2020. This legislation allows businesses to delay paying the company responsible portion of payroll taxes that would normally be accrued between March 27th, 2020, and December 31st, 2020. The deferment doesn’t even have to be paid back all at once! Two payments are required — half on December 21st, 2021, and the other have one year later the same day. This tax deferment is only for businesses that did not get one of the SBA paycheck protection loans. However, businesses that do qualify will get two years to pay their 2020 payroll taxes.

Also included in the CARES Act for 2020 is an Employee Retention Tax Credit. This deduction allows your business to get a payroll tax credit if you are at least partially shut down by government order due to COVID-19, your quarterly sales revenue has dropped by at least half, and you have 100 or less full time employees. A wage credit up to $10,000 per employee can be claimed to keep paying your employees. If your business employs more than 100 people, the tax credit can be claimed for furloughed employees or employees who have a drastic reduction of hours. This tax credit is also not applicable for businesses that received a paycheck protection loan.

Alternative Motor Vehicle Credit

If you’re investing in a fleet of cars or business vehicles, not only can you use Section 179 deduction, but you may also qualify for the Alternative Motor Vehicle Credit if the vehicles you purchase use an alternative fuel source such as hydrogen fuel-cell technology. Although the credit doesn’t apply to electric or hybrid cars, you might also qualify for the Qualified Electric Vehicle Credit (Form 8834).

Qualified Research Expenses Credit / Increasing Research Activities Credit

Businesses that are tech, medical, or manufacturing related niches are often eligible for the Qualified Research Expenses Credit / Increasing Research Activities Credit. This credit, for small businesses only, is meant to encourage business owners to do their own domestic development and research of new products.

Some of the activities that qualify under this credit include:

  • Developing new products, formulas, or processes
  • Development of protypes and models
  • Applying for patents
  • Certifying
  • New technology development
  • New software development
  • Environmental testing
  • Building new or improving manufacturing facilities
  • Streamlining internal business processes

You’ll need form 6765 and Form 8974 for your 2020 business taxes. Consult your tax professional because many more businesses qualify for this deduction than actually take the deduction.

Summary

Business taxes can be challenging to understand, and with so many deductions and credits available, consulting with a tax professional is always the best option. While our list is inclusive of tax credits related to purchasing business software or new technology, there are many more breaks your company could be taking advantage of. Regardless of your previous tax years, 2020 is a great year to invest in your new software and technology for your business and take advantage of these amazing tax breaks while they are still available.

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Thanksgiving Is Devastated

Give Back to your Community at Thanksgiving
Give Back to your Community at Thanksgiving

Thanksgiving Is Devastated

It’s been a rough year for not only the people of this country but people around the world. With Covid-19 taking the lives of hundreds of thousands of people and causing worldwide economic damage, there are more people than ever that are going hungry. There are long lines of people waiting for hours at food banks that have never had “food insecurity” before in their lives.  

In addition, so many of the people who were just making it are now going hungry, many are one step from eviction or living in tents or out of their cars. Many of these are communities or color or minorities.

While the impact of the coronavirus has been felt by all of us, leaving us feeling isolated and not a little anxious, the impact on poorer communities and people living close to the edge has been devastating.

We have all become exhausted by dealing with the coronavirus, locked up at home, unable to spend time with our extended family and friends or haven’t been able to hug friends and family since the pandemic started. Gratitude might not be at the top of our to-do list. But, however bad it has been for us and it has been bad, we can still give to those who have lost what little they had.

For some, Thanksgiving isn’t going to happen at all. It’s heartbreaking to know that families are going to bed hungry, including many children. While it’s been one of the worst years we have ever experienced, just by chipping in a few dollars or maybe spending a few hours volunteering, we can improve the lives of our fellow Americans who have it so much worse than us.

Here are some ways that we can give to those who are in desperate need right now.

Donate or Volunteer Over Thanksgiving

 

Help to Provide Thanksgiving Meals to Military Families:

Giving Thanks to Heroes helps military families that are in need at this time of the year. It provides a complete Thanksgiving dinner to military families. It’s a great way to give back to those who gave so much for our country.

https://www.homefrontamerica.org/index.php/programs/thanksgiving/

Feed the Poor and Hungry

FeedAmerica.org is an organization dedicated to ending hunger in this country. As they put it on their website, “More families than ever are facing empty plates this holiday season.” Over 50 million people in the U.S. may face hunger in 2020 including more than 17 million children.

If each of us donates just a few dollars, we can ensure that everyone has a “full plate” at Thanksgiving.

https://www.feedingamerica.org/

They also organize foodbanks where you can donate money or food to help your local community. There are very few communities in the United States that don’t have long lines at food banks right now. Ensure that they have enough food to feed everyone. Give a few dollars. It may not seem like much but together we can make a huge difference.

Donate to a Local Food Bank

https://www.feedingamerica.org/find-your-local-foodbank

 

Volunteer over Thanksgiving

Meals on Wheels

We have all heard of Meals on Wheels. It delivers nutritious meals to seniors who are at risk for hunger. If you want a more tangible way of helping people in need this holiday, you can look into delivering meals to seniors.

https://www.mealsonwheelsamerica.org/signup/find-programs

World Hunger

If you are looking at helping people worldwide, check out this list of charities that are helping to combat hunger around the world:

https://www.delish.com/food-news/a33927554/charities-that-fight-hunger/

It has been a record breaking bad year but it doesn’t have to break our empathy or our giving spirit. Helping those in need can lift us up and lift our spirits while ensuring that others in our communities have enough to eat.

Next year is going to be so much better. In the interim, let’s take care of each other the best that we can.

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Increase Your Business by Offering Point of Sale Financing

Point of Sale Financing Increasing Sales
Point of Sale Financing Increasing Sales

Increase Your Business by Offering Point of Sale Financing

When it comes to manufacturing and reaching your customers, business-to-business sales tend to be a little different than business-to-consumer. Your product, whether it’s vehicles, equipment, or software, is essential for businesses to operate. However, manufacturers often run into a problem. Small businesses that need the product or equipment your business is manufacturing often cannot afford the entire upfront cost of your product or it would negatively impact their working capital. This barrier not only hurts the small business who could significantly use your business to expand their own, but it also creates a barrier to your sales and ability to reach all business owners in your market.

One solution to expanding your business-to-business sales is to offer financing at the point-of-sale for your clients. According to a Forrester Research Study, businesses that offer to finance can expect up to a 32% increase in their sales. Like any business, the one you own could surely benefit from a nearly one-third increase in your sales, right? The problem is, how can your business afford to offer credit or financing to your customers and let the product walk out the door without full payment? Third-party financing vendors can help you!

Benefits of Point of Sale Financing to Businesses

Your business owner customers love POS financing because they can get a quick decision due to expedited underwriting and an electronic application process. Many customers also see benefits through these financing methods compared to trying to secure a small business loan outside of your company through traditional lending.

How often do you have customers checking out your equipment, fleets, software, or other business products, just to leave empty-handed when they find out the cost of what they need? Many of these business owners plan to obtain a small business loan to make a large purchase; however, how often do they return? Offering customers the ability to immediately purchase the equipment, software, or technology they need to grow their business through POS financing is a surefire way to increase your sales and customer base.

Another benefit of capturing the sale through POS financing is the added opportunity to up-sell the business owner. When customers obtain financing from some third-party financing companies, they can turn the large upfront costs into a monthly payment. Manufacturers have the opportunity to offer the business owner a chance at better technology, the upgraded model they were eagerly eyeing, or adding on the bonus of automatic yearly or multi-year subscription software services to the sale. The Forester Study referenced early also showed that most of your business clientele would increase their order value by up to 75% when they qualify for POS financing.

Business owners also have the opportunity to secure funding without having to jump through the hoops of mountains of paperwork and applications, compiling information that lenders suggest, and dedicating the extra time to securing a loan. Through POS financing under $500,000, a business owner can often skip most of the paperwork in many cases and get approval with just a one-page financing application.

The ability to increase your average transaction dollar amount without reducing your margins substantially adds to the profitability of a manufacturing company or wholesaler.

Manufacturing companies often need a large amount of working capital in order to offer their customers in-house financing programs. However, there are third party financing vendors that your manufacturing or wholesale company can partner with to leverage these financing options at the point of sale.

Benefits of Using Third-Party Vendors for Financing

One of the most significant benefits of using a third-party vendor for your point-of-sale financing is the shortened time between the sale and collecting the total payment. When companies use third-party vendors for financing, there is usually no wait time between the sale agreement and payment in full. The business-owning customer is making their payments to the financing vendor who, in turn, fronts the payment to your business for the customer. The third-party vendor will make money from interest rates while you have peace of mind that you captured a more significant sale and a loyal customer through financing.

Another significant benefit of using third party financing vendors is the ability to approve customers for loans who may not qualify under traditional financing guidelines through banks or other lending institutions. Third-party vendors understand that not every business has working capital and cash flow that allows them to make large purchases. When business owners cannot qualify or get turned down by banks for traditional business loans, they usually think their options for financing are limited. Third-party vendors open up brand-new doors for your customers to expand or upgrade while also building their business credit and reputation.

Another difference between financing companies and a bank is that the bank usually requires a UCC on all of the business’ assets. Financing companies are generally unsecured because they only have the purchased equipment or software as collateral. Purchasers generally are not eager to have all of their business assets as security for a bank loan.

If your business is ready to take the plunge to finance business owners at the point of sale, and you want more information on how to make this possible through third-party vendors, contact Dimension Funding today at 800-755-0585.

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Why Financing Your Software Subscription Is a Smart Business Decision

Grow you Business with Software Financing
Grow you Business with Software Financing

Why Financing Your Software Subscription Is a Smart Business Decision

Many businesses have moved to a variety of software to streamline their business processes including HR, billing and invoicing, tax management, and point of sale systems, property management programs, cloud-based programs, ERP, CRMS, and much more.  Many companies pay for the subscriptions upfront along with the costs of implementing the software, which can be considerable. This can impact the working capital and cash flow of the company, particularly for small and medium-sized businesses. Financing can be a way of meeting your software needs while still maintaining cash flow.

Financing for Software Subscriptions

You might not realize you can obtain financing for software your company uses, including software renewals. While you might not necessarily need a loan for your software subscription renewals and payments, financing can help you keep your cash on hand, particularly during economic downturns and give you stability and certainty in your financial position.

Financing business software subscriptions gives the opportunity for your business to choose monthly payments rather than lump sum payments. Yearly subscriptions mean paying more money upfront. Financing addresses this concern by providing the money for expensive software subscriptions and allows businesses to pay for the subscription and renewals in monthly payments.

Using financing to prepay for multi-year subscriptions also locks the software company into the original pricing for the term of your subscription. This means that even if the software company increases their fees and pricing, the price you paid when you choose a multi-year renewal is the price you get for the term of your subscription.

When implementing new software, businesses also have the cost of implementation and the training their employees on how to use the software. The implementation and training can cost more than the actual software, especially when you have many employees that need to learn how to use the software. Financing through a private funding company such as Dimension Funding can provide the funds for training, implementation, hardware, and third-party vendor costs. Bundling these costs along with your annual subscription fees allows you to break down the cost into low monthly payments that are more affordable than fronting all the cash at purchase. This allows small and medium-sized businesses to invest in software they might not otherwise have access to due to financials.

What Else Should Business Owners Consider with Software Financing?

Depending on your business, a traditional bank loan is not always an option for financing. Banks often put a blanket lien on all of the company’s assets as collateral. Financing companies generally are unsecured as they only use the software / hardware as collateral. Banks are also not always keen on offering financing solutions for businesses that haven’t operated very long or small businesses that don’t have a lot of cash flow. Banks also require a lot of paperwork and can take weeks to approve you for a loan. These reasons are why so many small and medium-sized businesses are finding solutions in private funding groups such as Dimension Funding.

Small, privately owned financing companies for businesses make financing your software subscriptions easy to understand. There are often no lengthy financial records needed, and good credit can get businesses fast approval in less than 24 hours. Many of these financing companies, like Dimension, offer online applications and DocuSign so you don’t have to print out the paperwork and scan it back. Businesses also have a unique opportunity to be able to finance their business hardware and professional services alongside their subscriptions with many of the private financing companies.

Business owners should consider upgrading their hardware, such as servers, computers, printers, and office equipment through private financing companies. An investment in your business technology can streamline your processes and leave your clients satisfied. Professional services, implementation and training costs related to new software and hardware, as well as the delivery and maintenance of the new technology can also be financed and bundled with the software subscription.

Why Choose Private Funding?

If you’re trying to take your business to the next level and invest in technology and you haven’t been in business for long, you’re generally going to get told “no” by banks. Traditional bank loans can be difficult for many small to medium-sized businesses to get. Private funding offers more flexible term options, less paperwork, and financiers who understand your business needs.

Private funding companies like Dimensions also work as financing partners for vendors and can offer working capital loans that can improve your cash flow management. Private funding companies offer business financing solutions that work for owners to improve and expand their business. Dimension Funding and other private funding companies can also help with equipment needs, with everything from computers to furniture to fleets and construction equipment and tools. Funding companies don’t just offer loans; they offer business solutions tailored to your business needs.

If you are interested in discussing funding and financing for your company, contact Dimension Funding at 800-755-0585.

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