Both financing and leasing companies must rethink things over before deciding to use the standard type of leasing document when it constitutes the software in terms of cost for the major components. Fast that the rule framework of UCC is not allowing the lease of software.
The word lease means transferring of the right of any goods and positions in exchange for any terms agreed. Come to think of this, even finance companies or leasing companies may tend to use agreements in software finance or any other documentations that are closer to it just to make sure that it is understood that it’s having its customers financed when it comes to the acquisition of their software license, if not, the security interest of the lender will be soon questioned.
With that, there are some finance companies unsure if they are able to approve their customer credit when it is done with unsecured basis. This kind of risk comes from the fact stating that there are several license agreements that may contain languages or technical l terms that would unknowingly forbid the licensee like the borrower or the lessee from either pledging or assigning their rights under its license agreement and these kinds of provisions are known as the anti-assignment.
Even if those kinds of provisions could actually prevent the lender to obtain the secured interest with the license, UCC states that the license owner has no need of recognizing the security interest in his software because of the following reasons: It is never enforced to be against with someone that is obliged with the license; this never imposed any obligation or duty of the person that is responsible for the license, them this never requires the same person to have the security interest recognized or even to render or pay the lender with the performance or in the other way around, another is that the lender has no right to assign or even use the right of the borrower under the license, never gives the right for the lender to use, to have any access or to even possess any kinds of trade codes or information set to be confidential with the person that is now liable to the license and lastly, this will never allow the lender to provide any security interest in the license.
With those reasons, there will be no assurance that the value will be received with its security interest. Given that you have the consent of the licensor when it comes to entering financing of the software or with any other technological equipment may always have the strong need just for you to have it upgraded or even just modified. With the given problems when it comes to realizing software’s value, both finance and software companies must give more favor for those customers having strong credit records.
Know more about leasing software through checking it with the IFRS leasing software