Evolve is one of the ‘E’s in our company name and the evolutionary shift in mindset of companies like ours, particularly in terms of the types of assets which we can provide payment solutions for, has been remarkable.
Historically, financiers have only been comfortable funding what are commonly regarded as ‘traditional’ assets which had to meet three specific tests – they had to be (i) tangible, (ii) moveable and (iii) re-sellable. This is a perfectly understandable mindset in an industry which is seen as conservative as the fall-back position if a client went into receivership was that the financier could repossess the asset which they had funded and sell it in the second hand market thereby minimising their loss.
The rapid rise of the technological age since the 1990’s meant that financiers had to then look at funding less traditional assets such as desktop computers, laptops, servers, etc. Whilst it did take quite some time for financing of IT equipment to become universally accepted, most financiers were able to get comfortable with the new asset classes but the fact was that the assets still had to meet the three criteria of being tangible, moveable and re-sellable.
Then we fast forward to today and the market reality that many solutions are being sold “aaS” (as a service), which has brought about the need for further flexibility around the type of payment solutions which financiers provide. However, even before figuring out a financing product to fit the “aaS” solutions, it has also meant that financiers have had to totally change their mindset around the types of assets which they are now being asked to consider financing.
Software and Services are not tangible, they are not moveable and in the vast majority of cases they are not re-sellable, which is directly contrary to the types of ‘traditional’ assets mentioned above. The result has been that the more conservative banks and financiers have been very slow to shift their mindsets, and because of the pace at which the market is now moving in this area, those organisations are missing out on large opportunities.
The organisations who have seen this change coming, prepared for it and realise that although software and services are not tangible, moveable or re-sellable, that does not matter as those financiers have an appetite to back their customers growth and they will support them by providing solutions which their client needs and not those which are most profitable for themselves.
For more information on how 3E can provide the optimal payment solution for your businesses software and services needs contact us.
Author – Brian Swan