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Technology Project Finance

The Capital Advance Technology Project Finance Group offers our clients a deep level of expertise in the structuring and funding of complex technology projects. Our project managers understand the oftentimes complex relationships between the various suppliers of equipment, application software and development work.

Capital Advance is one of the few firms with the comfort level necessary to provide implementation finance for those projects that are installing over an extended period of time. We are able to provide financing or leasing options for ALL of the costs associated with a given project including; licensing, development work (including offshore development work), in-house development work, implementation charges, annual maintenance and consulting charges related to training.

We are pleased to provide you with the following Solution Profiles from our Technology Project Finance Group for your review:

Implementing Enterprise Wide Systems

A global printed circuit board manufacturer was implementing an organization wide ERP software project for $10,500,000. The software would touch all aspects of the company’s operations including customer relationship management, inventory control, manufacturing, system wide reporting, imaging and financial management. The challenge for the company was that it was a 12 to 18 month installation period with 50 software modules including customization and implementation charges. Further, each software module had a minimum of 3 invoices associated with it that would need to be managed for timely payment to the vendor.

The Capital Advance team customized weekly invoice reporting for the company to track the progression of the project. This ensured payments were made in a timely fashion or held up payments to the vendor where the work wasn’t completed properly. Capital Advance provided a cost effective solution tailored to the clients needs that enabled their software partner to complete the implementation within the timeframe promised.

A Study in Cost Savings

A large northeastern hospital system was acquiring 2000 infusion pumps employing the latest technology. The equipment was to be tested over a three month period and implemented over the following two months.  The equipment vendor was providing a full service lease with maintenance and supplies included in one bundled monthly payment. The client had a difficult time analyzing the implicit rate on the transaction because the vendor wouldn’t break out the various cost components associated with each pump. The per unit cost was nominal, but the client was concerned that the overall project cost would come in much higher than the budgeted $2,500,000, and the hospital had an urgency to update the existing equipment.

Capital Advance worked with the Director of Materials Management and the Chief Financial Officer to develop a break out analysis of a comparable vendor’s costs for similar technology and supplies. The Capital Advance team was then able to craft a solution that provided for a five month per unit ramp up of lease payments to match the equipment install. This solution was overall more cost effective than the proposed vendor solution. The Hospital was able to take the competitive equipment information generated by Capital Advance and negotiate the price down an additional $200,000 off of the entire project with the vendor. When the cost of financing was taken into account, the Capital Advance team helped saved the hospital approximately $300,000 over a five year term.

M.I.S. Communications

A national auto parts retailer had 1200 stores communicating data to their corporate office via satellite systems. The previous lessor had gone out of business and maintenance agreements on the equipment were coming up for renewal. The client required a buy-out of the old equipment leases and to wrap the cost of the maintenance contract into a new three year lease. At the end of three years the client was planning on upgrading all of the in-store communications. The challenge…the equipment was already over 10 years old.

Capital Advance was able to finance the ten year old equipment and subsequent lease buy-outs from the defunct lessor. Additionally, we obtained a discount for the client on the annual maintenance contract by paying that upfront for three years and financing it over the term of the contract. Capital Advance has become a major supplier for the company with financings encompassing everything from additional satellite equipment to multi-state Point of Sale (POS) implementations.