Lenders Say Credit Still Available for Technology Spending

By Jessica Davis  |  Posted 2008-10-01 Email Print this article Print
 
 
 
 
 
 
 

Credit may have dried up for some businesses, but three big sources of technology credit say it's business as usual for technology credit. Ingram Micro, Tech Data and IBM Global Financing say their IT solution providers and IT consultants have as much access to credit as before the Wall Street meltdown and subsequent failed bailout.

When it comes to credit for technology deals, IT lenders are saying that it is business as usual in spite of the Wall Street financial meltdown and subsequent failed bailout package.

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That's according to Ingram Micro, Tech Data and IBM Global Financing, three giants when it comes to providing the credit that makes many technology deals possible.

"It's business as usual," an Ingram Micro spokeswoman told Channel Insider.

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"The current economic climate has been a real opportunity for companies like IBM Global Financing. Because we are asset-based lenders that leverage the value of client technology or the inventory and account receivables of channel partners, we are becoming a bright spot for companies in search of funding," said an IBM Global Financing spokesman.

Tech Data Director of Credit Scott Tillesen said that the credit woes that are being experienced in other industries haven't touched Tech Data either.

"What caused the lending businesses to get into trouble that they are in? There's no question that this is a repeat of what we saw in the 1990 era with the collapse of banks and low-documentation loans," Tillesen said. "The initiating loan brokers have fallen into the same trap of not doing good tracking of who they were lending to."

So while Wall Street dives and credit dries up for other industries, it's also business as usual at Tech Data right now.

"Tech Data credit is largely factually based with a good amount of documentation and research," Tillesen said. 

"Are our antennas up? Yes. Have we changed the way we do things? No," he said.

"The rates are exactly the same and the terms are exactly the same. We are offering more attractive terms in some cases," Tillesen said.

That said, Tillesen also noted that Tech Data is doing a little more counseling of its reseller customers, "providing them with a little more direction on things they could be doing better that would serve them better in this environment."

For example, the company is encouraging them to ask their end customers for pre-payment or to offer an accelerated or prime payment program. Customers are more likely to respond to understanding changes like that in the current environment.

"For every dollar of assets a reseller has, they need a dollar of financing," said Tillesen. "So what they should do is minimize the amount of assets on their balance sheets. One place to look is accounts receivable."

Tillesen also recommends resellers tighten up their collection efforts.

"The carryover is that all these actions will strengthen their balance sheet so they could get more credit if needed," Tillesen said.

 
 
 
 
Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com
 
 
 
 
 
 

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