IBM Global Financing Drops Small Business Flexible Credit Program

By Jessica Davis  |  Print this article Print

IBM Global Financing has notified solution providers and resellers that IGF will discontinue its IBM Flexible Credit program for inventory financing at the end of 2008. IGF says the program did not meet its business goals. The move has representatives from GE's commercial finance organization looking to win some additional credit customers.

IBM Global Financing will discontinue its IBM Flexible Credit program for inventory financing at the end of 2008, saying it "did not meet the business goals set by IBM Global Financing."

IBM has notified its business partners and resellers in the United States, Canada and the United Kingdom of the change, a company spokesman confirms. The program enabled partners to apply for and manage via the Internet a line of credit up to $500,000.

"IBM told us the program is defunct as of Jan. 1," says Debra Candido, vice president of administration at solution provider Manhattan Information Systems, which relied on the program. "GE Finance has said to us, 'Increase your credit line with us now.'"

It's no surprise that the program is going away. The IBM Flexible Credit program allowed resellers to make purchases on a revolving line of credit. The program's credit applications – for credit lines from $100,000 to $500,000 – were completely automated and processed over the Internet.  And while that was great for resellers, it is a program of another time.

The move by IGF to discontinue the program comes in the aftermath of a financial crisis that has tightened credit markets for businesses, particularly small businesses. The Flexible Credit program was designed to serve small businesses, according to Candido.

"This move is consistent with the conservative credit standards and practices at IBM Global Financing that has helped our company endure many prior financial crises," the IGF spokesman says. "We will periodically evaluate programs that effectively address both our suppliers' and resellers' needs for credit and our target business results."

The IGF spokesman says that commercial financing relationship managers will "help qualified resellers establish a new credit facility" under IGF's traditional inventory financing program.

But Candido's company was not offered the opportunity to be part of IBM's standard financing program, and the documentation requirement for doing so would be like "starting all over," she says.

"We've decided to increase our line with GE," she says. "We also plan on approaching our third source for an increase. ... In addition, if need be we will ask for increases directly with the distributors. Right now we are all set, but you never know if a surge comes suddenly. If so, I want to be prepared."

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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