Technology Finance Strategies In a Tough Economy

Churches, stadiums, arenas, live theatrical venues, broadcasters, convention centers, and any organization that has embraced media technology as a primary communication tool may be uncertain about how to proceed with budgeting and funding existing, planned or future projects. One thing is certain; most organizations are taking a careful look at their revenues, tithing, contributions and sources of current and future revenues, cash flow or donations. While some organizations have chosen to "table" projects it appears that many projects continue to be underwritten and funded.

Many organizations that, in the past, might have paid "cash" or traditionally funded out of the Capital Budget are now seeking to retain cash and limit the use of Capital Budgeting. Many of these firms now consider use of the Operating Budget as a means to pay for needed equipment, systems and technology out of "real time" cash flow as it occurs month to month.

Many types of equipment and technology projects either create savings or enhance revenue. Often the technology can "pay for itself" over time as the new system creates additional monthly revenue or provides savings that match the monthly payment.

Equipment and systems are currently discounted at historic levels. Combined with low interest rates the overall cost of acquiring media technology on a budgeted or cash flow basis may be extremely timely.

Historically a company might Capital Budget $100,000, in the current year, for a project with the expectation that the equipment would operate for 3 years. Iin the current economy, by using financing, a firm might choose its Operating Budget to cost justify $100,000 of equipment as a monthly payment solution. The benefit is a lower annual outlay of capital, and the amoritzation of costs over the useful life of the equipment and monthly payments that are paid out of monthly revenues and cash flow.