Cisco Helps VARs Deploy with 'Progress Payments'By John Hazard | Posted 2006-05-31 Email Print
The program of interest-free advances is designed to encourage Cisco Partners to take on more projects by offering support during lengthy deployments when payment may be months away.Cisco Capital, the finance arm of network vendor Cisco Systems, is offering its VARs interest-free advances, called Progress Payments, to help cover expenses during lengthy deployments.
The measure will enable Cisco VARs to juggle more projects at once without struggling to keep the lights on while waiting for final payment, said the San Jose, Calif., company.
Unified communications projects are the only jobs currently eligible for the program, because "that is where partners said they felt the pain," a Cisco spokesperson said.
Partners are paid advance installments as the project reaches milestones defined by partner and customer, up to 80 percent of the total. On payment of the final stage, the total investment is transferred to a lease.
"Our Cisco business continues to increase, and most of that is on the IPC side," John Harbour, finance coordinator at Berbee Information Networks, a Cisco Partner, in Madison, Wis. "Those are two- to four-month deployments and it is always a dilemma. No customer wants to pay until it is operational, but how do you keep the lights on in the meantime?"
Some installations can cost over a million dollars and include heavy upfront spending on equipment and resources, Harbour said. Progress Payments are intended to enable VARs to take on big projects without reservation and allow customers to pay upon completion, he said.
The program was born out of partner comments expressing the difficulties of funding projects on their own budget for months at a time, said Mandy Knotts, a Cisco spokesperson.
"The partner has invested all this money in and they can't recoup it for a while," she said. "It limits how many projects they can handle at one time. They can't afford to go out that far on the limb."
The program should enable partners to accept more and larger projects.