Everywhere you turn, technology has infiltrated literally every aspect of life. From the foods we eat to the healthcare we receive and on down the line to the way in which goods are manufactured and delivered, technology plays a central role. No matter what line of business you are in, can you afford not to invest in technology? If you are on the fence because you just don’t have the capital you need to invest in technology you really know you need, here are some points to consider.
Will Technology Help You Yield a Higher Profit?
One of the reasons you may be considering the advantages of investing in technology at this point in time is because of the higher profits you could realize by instituting some hi-tech solutions. It could be fully automated production lines and it could be a total revamp of your IT department, but in any case, if that technology will result in a higher profit, it’s time to seriously consider making that investment.
What Is the Competition Doing?
You might also want to look at what the competition is doing. If they are applying hi-tech solutions that offer a better quality product, you can’t sit back and let them put you out of business. Consumers are savvier than ever before and they know the difference between a product that is ‘acceptable’ and a product that is state-of-the-art. This is one of the reasons why so many people want to buy American or European. Products made in China may be cheaper but they are inferior in quality. The difference? Technology is a big one.
Small Business Loans to Update Technology
There was a time when you’d go to a lender and explain that you needed a loan to move to a bigger location or to buy extra machinery or simply to add equipment you need because you are expanding your product line. Typically, that was all the explanation they’d need because your company and its assets were security enough for the loan. Today it’s a totally different ballgame because some of that technology is intangible. For example, hiring an IT team to revamp your mainframe isn’t going to be 100% visible. Yes, the computers and telecommunications equipment will be tangible but what about the money you are paying for IT expertise? Their knowledge and labor isn’t going to be something a bank can hold a note against, so you may need to secure the loan in some other way.
How Much That Loan Is Costing
Before deciding on a loan, you should understand the real cost of it. Interest rates are always difficult to understand because there are various rates being quoted. The one you need to be concerned with is the APR because it reflects more than just the interest rate on the loan. The APR can cover anything from origination points, broker points and any other finance charges that might be attached to the loan. This is, then, going to be at a higher rate than the simple interest being quoted. If you are confused as to how that amount was calculated, you can use free online APR calculators to get a true picture of what that loan is costing you.
No one likes to pay interest on a loan but sometimes the benefits outweigh that expense. You need to invest in technology so what would be worse? You can’t let the competition get a jump on you and you certainly can’t be without a reliable mainframe. Can your company afford not to invest in technology just because you may be reluctant to get a small business loan? Probably not so keep up with the times and finances will work themselves out.