Cisco Extends Payment Terms, Financing Options

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.