5 Financing Options for Your Industrial IoT Projects
Many companies are ready to move forward with Industrial IoT (IIoT) business initiatives. However, they often encounter funding obstacles. Here are five IIoT financing options to consider.
Government bodies and private companies frequently offer grants to push IIoT progress forward and help businesses see how they can avail of the technology within their workflows. Applying for this type of funding can be time-consuming and may require filling out substantial paperwork or submitting supporting documentation.
However, the payoffs can be worthwhile. BehrTech — a Toronto-based startup— recently received $3 million to build an IIoT lab. The company received the amount through a joint grant from a government body and a nonprofit. BehrTech specializes in the Internet of Things and hopes its new center will be a place that facilitates overcoming existing connectivity obstacles and testing prototypes.
Companies that know what kind of IIoT equipment they want to use for a project could investigate whether the brands offer equipment-as-a-service (EaaS) options for IIoT financing. This relatively new model provides items to companies on a subscription basis, reducing upfront costs and spreading the overall expenses over time.
This arrangement provides mutual benefits. Paying by the month helps interested companies from a financial standpoint. However, the providers can also remotely monitor the equipment. That option lets them spot declines in functionality and performance before breakdowns happen and lead to expensive maintenance. The EaaS model works particularly well when initial costs are among the main sticking points preventing a company from using IIoT tech.
3. Business Line of Credit
A business line of credit is another viable option to pursue. Since this is a revolving option that lets people withdraw funds repeatedly as they pay back what they use, it’s ideal for company decision-makers who are unsure how much their project might cost.
Customization is another benefit of a business line of credit. Some options offer up to $5 million to successful applicants. People can also get low, fixed interest rates and only pay on the amount used. Companies that take the time to learn about the options and choose arrangements that work best for their needs should find it’s more straightforward than they may think to get IIoT financing this way.
Some industrial IoT projects provide clear benefits that customers immediately understand. For example, a company might want to invest in sensors or machines that aid in quality control, speed research and development, or allow meeting a known customer need.
In such instances, a company could turn to its base to get the money needed. Crowdfunding could be the answer even if the changes a brand makes are relatively minor. One recent example raised €163,623 for a deodorant company to create a new applicator cap. That company didn’t mention using IIoT tech for the different design, but it’s a case study in the value of customer loyalty. People liked the brand and appreciated the different cap, and they eagerly funded it.
5. Company Partnerships
Corporate partnerships tie into industrial IoT projects, too, particularly if the company using the technology wants to explore forward-thinking possibilities. Many examples of this are happening already as companies experiment with the capabilities of the 5G network. Two recent separate cases involved a British telecommunications company offering a 5G network for a manufacturer and a Finnish company of the same type doing that for a mining company.
The 5G network is not a prerequisite for successful industrial IoT projects. However, early trials indicate it will provide plenty of advantages for entities wanting to connect and use industrial equipment. Collaboration between companies could be an option for financing IIoT initiatives. That’s especially true when the provider desires more real-world evidence of the viability of what they offer. This option requires recipients to use particular brands, though, which may be restrictive.
Funding for Industrial IoT Projects Is Within Reach
Financing an IIoT initiative can pose substantial challenges. However, companies have a feasible assortment of options to consider, and this list should get people thinking about methods they may not have explored yet.
This article was written by Devin Partida, Editor-in-Chief at Rehack.com.