IBM Global Financing Extends $2B in Stimulus Fund CreditBy Jessica Davis | Print
IBM Global Financing is looking to help IT organizations jumpstart IT projects today by using credit rather than wait for stimulus funds to be available in 2010 and 2011 as part of the American Recovery and Reinvestment Act (ARRA).
IBM Global Financing is adding another $2 billion in credit
available to end customers over and above the approximately $40 billion
it offers them each year, in an effort to jumpstart any IBM-related IT
projects that may be awaiting economic stimulus funds expected to
become available as a result of the American Recovery and Reinvestment
"We know that there are trillions of dollars planned as an economic stimulus, but a lot of that funding won’t get to companies or governments until 2010 or 2011," says Richard Dicks, general manager of the Americas for IBM Global Financing. "Many of our clients are looking for ways to finance their IT projects and they want to get started now."
Dicks notes that IBM’s channel partners and end customers are finding it harder to get credit for technology purchases. Credit is very tight and very costly, he says.
Credit will be granted based on the credit-worthiness of the client and
will not be secured with the promise of a government loan or grant.
Financing will be available for technology from hardware to software to
services to solutions, says Dicks. For example, one of the technology
types called out by the stimulus package is smart grid technologies.
IBM Global Financing can finance a service engagement that goes from
the definition of the project to the implementation, providing a
deferred payment plan for the first 90 days, interest-only payments for
the next 9 months at a floating below market rate, and then allowing
the customer to pay the principal at 12 months.
"That would help a client who wants to get started," Dicks says.
The new $2 billion in credit is specifically for stimulus package projects such as smart grid, health care informatics, other health care projects, education and broadband.
"We want to make sure that the availability of credit doesn’t inhibit clients from purchasing," Dicks says.
He also notes that many of IBM’s partners offer solutions that fit into the technology areas identified in the stimulus package. Partners can bundle this financing together with their proposed solutions to help customers purchase the technology they need now instead of waiting.
"As I meet with CFOs and corporate treasurers, the single biggest thing I hear about is that access to financing is the biggest issue right now," Dicks says. They want to make sure they have enough funding to complete the projects they start, and they are looking to restructure existing financing that they have in place.