Cisco Extends Payment Terms, Financing Options

By Lawrence Walsh  |  Posted 2009-06-02 Email Print this article Print

Cisco is extending payment terms to 90-days for solution providers using financing programs for product sales. Cisco says the six-month program will allow partners to keep working capital for technology and business investments.

Cisco Systems is continuing to try to stimulate partner sales and profitability through its financing options, and is extending payment terms to 90 days for the next six months for solution providers already participating in its financing programs.

Over the last six months, Cisco has rolled out a series of stimulus initiatives and financing resources to help spur sales of its core and advance technology products. Since the beginning of the year, Cisco has promoted its financing options, providing resellers and end users with payment plans and loans to purchase products.

The extension of payment terms from 60 to 90 days will allow Cisco resellers already using the financing programs through Cisco Capital to hold cash for operations and short-term investments, Cisco says.

"The goal is to help our partners with an additional 30 days of working capital," says Edison Peres, senior vice president of worldwide channel, Go To Market Group at Cisco.

At the Partner Summit in Boston and previous Cisco events, Cisco has touted the benefits of partners who lead with financing or use financing in packaging product sales. Keith Goodwin, senior vice president of worldwide channels, in his keynote address in Boston, said Cisco partners who leverage financing options book deals that are 34 percent larger than non-financed deals.

Cisco has offered zero- and low-interest financing options, rebate programs for core technology products and loans for capital and business investments since the beginning of the recession. Through the Value Incentive Program (VIP), Cisco has awarded nearly $2.5 billion in loans and financing. However, Goodwin says only 10 percent of Cisco’s partners are using financing.

Peres says the lack of engagement is costing Cisco resellers opportunities for investment in their businesses and markets. Solution providers who use extended payment terms and financing are 20 percent more likely to invest in their business and expand their capabilities than those who don’t.

"These are powerful tools and want to make sure we continue to use them with our partners," Peres says.

Lawrence Walsh Lawrence Walsh is editor of Baseline magazine, overseeing print and online editorial content and the strategic direction of the publication. He is also a regular columnist for Ziff Davis Enterprise's Channel Insider. Mr. Walsh is well versed in IT technology and issues, and he is an expert in IT security technologies and policies, managed services, business intelligence software and IT reseller channels. An award-winning journalist, Mr. Walsh has served as editor of CMP Technology's VARBusiness and GovernmentVAR magazines, and TechTarget's Information Security magazine. He has written hundreds of articles, analyses and commentaries on the development of reseller businesses, the IT marketplace and managed services, as well as information security policy, strategy and technology. Prior to his magazine career, Mr. Walsh was a newspaper editor and reporter, having held editorial positions at the Boston Globe, MetroWest Daily News, Brockton Enterprise and Community Newspaper Company.


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