Video: 10 Minute IT Jams - An update from BidFin

The path to digital transformation for many organisations is fraught with financial barriers. Bitfin, a company specialising in alternative finance solutions for technology suppliers and their customers, believes it has the answer.

Ross Simon, CEO of Bitfin, joined TMNIT Jams to share insights on how businesses can accelerate digital transformation with alternative funding models. "We've got a number of debt instruments that allow organisations across the country to ultimately digitally transform," Simon said.

According to Simon, traditional bank finance can be inflexible, especially when it comes to the digital economy. "A lot of traditional funders haven't really had a huge appetite for lending against many of the digital asset classes," he explained. "Banks like to lend against hard assets that they can look, feel and touch. When you think about a software licence, it's a right to use – it's sort of thin air."

Bitfin aims to fill this gap by offering payment plans which allow companies to access vital software and services without the hefty upfront costs. "These plans allow companies to spread the cost of software and services investment over time and pay for that technology as value is realised," Simon noted. He believes this approach increases return on investment and enables firms to access the technology they need sooner rather than later, "versus stalling those investment decisions due to upfront cost."

Beyond payment plans, Bitfin also provides working capital solutions, enabling businesses to extend payment terms to their suppliers and optimise cash conversion cycles. Significantly, the company has launched a new product specifically for those who may not have access to traditional bank funding but have managed to generate recurring revenue. "Bitfin actually works with organisations and looks at that forecasted monthly recurring revenue. We can pre-fund organisations upfront in advance against those future monthly recurring receivables," Simon said.

This model, he explained, enables organisations to gain upfront capital "without needing to dilute their equity shareholders so they can grow and hyperscale faster than they ordinarily would have been able to."

Simon highlighted the increasing pace at which companies are adopting digital transformation, driven by both internal demands and the evolving business environment. "It's imperative that all organisations have digital transformation as a key priority. Internally, having the right digital architecture and software applications – such as CRM, ERP or cybersecurity solutions – drives productivity and efficiency gains," he said.

Simon pointed out that technology also has a substantial cultural impact. "Technology allows us to collaborate far more effectively across our organisations. Greater communication and input from all employees leads to important cultural values such as inclusion and sharing of best practices," he added.

However, the most important driver remains the ability to serve customers better and at scale. "Having the right subscription-based applications is imperative to scale seamlessly and at large, without relying on costly and error-prone human intervention," Simon said.

When asked about the benefits of alternative funding, Simon was clear. "Alternative funding allows companies to go through digital transformation by accessing solutions like software and services payment plans or recurring revenue funding. They can accelerate their digital transformation investments and access the right technology today, without having to stall investment decisions due to unavoidable upfront invoices from vendors."

Simon believes payment plans are a strategic way for companies to begin digital transformation at a lower cost and to pay for technology as its benefits are realised. "Companies can get all of the benefits that we just spoke to a couple of minutes ago," he said.

For organisations seeking an alternative funding provider, Simon suggested a few key points to consider. "A track record from a funder is very important. If you're looking to fund technology, don't go to a mortgage broker or a car asset financier. Go to an organisation which actually understands technology as an asset class and what you're looking to try and achieve," he advised.

He further stressed the importance of forming a true partnership with the funding provider. "It's important to look for a funder that's going to take a partnership approach with you – not just at the transactional level. As our organisations continue to evolve, so do our funding requirements, so having a partner that will look medium to long-term and understand what you're trying to achieve is extremely important," Simon added.

Simon also cautioned against working with irresponsible lenders. "Make sure you're dealing with a responsible lender, not an organisation that's going to give you so much debt it's going to ultimately suffocate you. A true partner will look at your needs and provide debt that's ultimately going to help you grow, versus giving you a facility that's going to make life harder in the long term," he explained.

For organisations interested in exploring Bitfin's offerings, Simon made the call to action clear. "If any organisation is out there looking to acquire any technology whatsoever – whether it's hardware, software, or services – and you have any upfront costs within your business that you're looking to spread that cost on a monthly, quarterly or semi-annual basis, please just send a note in and one of our reps will be in contact with you within the hour to guide you through the process," he said.

As digital transformation becomes ever more integral to business success, the path to overcoming financial barriers is evolving. As Simon concluded, "A true partner will look at your needs and understand your requirements, and provide debt that's going to help you grow."