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Defaults on technology financing deals are on the rise, raising concerns about the ongoing availability of credit for such deals, according to a report, but technology distributors and technology vendors with captive financing arms say credit is still available for qualified businesses.

Ingram Micro CEO Greg Spierkel told financial analysts during an earnings call last week that the IT distribution giant had not yet noticed any delays in repayments from small and midsize business customers, but that it was keeping a watchful eye for that kind of indicator.
A Wall Street Journal report Monday said that defaults on technology loans have risen recently, which may not be such a surprise given the state of the economy and the ongoing credit crisis with other types of loans.

The WSJ report cites figures from the Equipment Leasing and Financing Association, saying that in September 0.86 percent of equipment loans, including office equipment, were written off as losses, compared with 0.48 percent during the same period a year ago. The organization is an industry group made up of 700 lenders.

With commercial finance getting a little tighter from other lenders, Ingram Micro’s Spierkel told Channel Insider that Ingram Micro is lending more than it has in the past to applicants that are solid. The company, he said, is less likely to lend "where the opportunities to make a return don’t look so good," he said.

D&H Distributing has also increased financing in the market, offering an additional $15 million of new credit to qualified resellers, the company announced recently, upping the total new credit offered this year to $25 million.

And Avnet’s John Paget, president of that distributor’s Technology Solutions IT distribution arm, told Channel Insider that his company has seen an increase in requests for new leasing quotes. "End users are requesting more lease quotes than they’ve ever requested before," he said.

The distributors are not alone. IBM’s captive finance arm, IBM Global Financing, also recently announced a new program, "Why Wait?" designed to help make technology leasing more available to partners and end customers.

 

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