Can a website be financed?

Financing websites has been a conundrum in the world of lending ever since the adoption of computers and their integration into our everyday working lives.

The stumbling blocks to website financing

Leasing companies tend to stay away from lending for website design, build and ongoing support. It is likely that you will have come across these objections when speaking to your finance broker/lender:

No viable asset

Lenders don’t see websites as an ‘asset’ to lend against, like with a typical lease finance deal for a car, for example 

Minimum financing terms

Websites don’t meet most lenders’ minimum amount requirements (A typical lender begins lending around £25k)

Technical Considerations 

Websites often require ongoing maintenance, updates, and hosting, adding complexity to the final price and therefore the financing of your website. 

Legal Complexities 

Aspects like intellectual property rights, usage terms, and liabilities can require a deeper technical understanding of the usage rights and intricate legal details, few lenders possess this ability in house. 

Why should you care?

Put simply, in 2024; your website is the shop-front for your business. You want your website to reflect what your business does, and the quality of your product/ service. A visibly poor website leads viewers to assuming your business is of similar ilk. 

Similarly, a website can be a key driver of sales, leads and revenue generation. Custom website development can enable your business to benefit from unique tools and features designed specifically for your requirements. When combined with an SEO and / or social media campaign, your website can put your business in front of your target audience.

However, there are many organisations who require website development that are in their infancy, or perhaps do not have the available budget - and these businesses still need a professional, high-functioning website to mirror the quality of what they offer.
 

What options are there?

With leases tricky to come-by, what are the finance solutions available so your business can take action with your website? 

1. Your website developer is loaned the money, and then ‘lends’ to their customers. This can cause issues if the website developer has no prior experience in similar deals.  

2.  Financing IP licences. IP finance is using intangible assets, (reputation, IP), in this case intellectual property, to gain access to credit. These are difficult to get approved, and come with a host of challenges: 

• Lenders’ lack of familiarity with IP as an asset class, due to:

• lack of confidence in IP valuation methodologies, and 

• the potentially illiquid nature of the underlying assets, leads to a high cost of transaction (interest rates). The rate for IP financing will not reflect the rate for a typical commercial loan. Be prepared to pay a significant amount of interest if you’re looking to finance IP.

3. You approach a boutique lender who takes a more commercial view than high-street banks, taking aspects such as the story and mission of your business into account, rather than simply lending based on the cold facts of credit. 

How we can help

At Made Simple Media, we understand the power of website development and as such have endeavoured to find a financial solution to help our clients to maximise their growth. 

That’s why we are proud to announce a collaboration with Mill Wood Finance, a boutique Brighton-based commercial finance brokerage who are available to discuss finance options for large website-related investments.

Henry Bolland, Commercial Finance Broker at Mill Wood Finance has commented “At Mill Wood we look at finance opportunities through a commercial lens. The story and potential trajectory of your business is a factor often disregarded by high-street lenders. In working with our panel of boutique lenders - we have the ability to write a story for our underwriting process, allowing our lenders to fully understand your business”.

What's next?

Whilst not every website can be financed, this new partnership will enable our valued clients to unlock new opportunities that may currently appear out of reach. If you would like to explore whether your website projects, either a new build or further development of your existing website, please let us know. We can set up an exploratory meeting with Mill Wood, providing our own technical expertise to ensure your quote and proposal is fully costed, transparent and accurate.

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