Cisco Lets VARs Approve Leasing Options for Customers

Cisco Systems Capital, the financial subsidiary of Cisco Systems, announced Oct.16 that it would begin allowing VARs to approve up to $50,000 in leasing credit for their customers.

The new leasing program is aimed at SMBs (small and midsize businesses) and gives cash-conscious companies the opportunity buy Cisco products with fewer upfront costs, said Maryann Von Seggern, director of world channel development for Cisco Systems Capital, with U.S. headquarters in San Jose, Calif.

The leasing program also gives SMB customers a better return on their investments and allows them to more frequently refresh the technology their businesses use, Von Seggern said.

For VARs, the leasing program allows them to provide a faster and more competitive way to sell Cisco’s networking solutions to SMB customers.

“This enables Cisco and its partners to sell more product,” Von Seggern said.

Click here to read more about Cisco’s leasing programs for the channel.

In April 2005, Cisco began its Capital Commercial program, which offered VARs a way to fast-track their customers for up to $250,000 in financing. The company had a similar program for enterprises, but decided that the SMB market needed a program more tailored to its particular needs.

The idea of lending money to push more product through the channel, especially in the SMB space, has become more popular in recent years. On Sept. 19, Juniper Networks enlisted IBM’s Global Financing to help develop a leasing program aimed at SMBs.

Read more here about Juniper’s recent partnership with IBM.

Under the new program Cisco announced Oct. 16, VARs can now complete the credit applications for SMB customers, offer them a quote and generate the necessary documents on their own.

By the end of 2006, Cisco plans to raise the limit from $50,000 to $100,000, Von Seggern said.

About 500 VARs and solution providers participate in the leasing program now and Von Seggern said she hopes to double that number by 2007.

Scott Faxon, a regional vice president for Digitel, a VOIP (voice-over-IP) solution provider based in Atlanta, said his company normally deals with businesses that have between 50 and 500 employees.

Most VOIP solutions will cost between $50,000 and $500,000, and Faxon said the Cisco leasing program has allowed his SMB customers a chance to afford the technology they need without the added concerns of an upfront cost.

Faxon also said he believes the leasing program has made his company more competitive.

“It’s a huge benefit,” Faxon told The Channel Insider. “You have more control over the process and the credit approval. It’s allowed to speed up the contract and the approval process and it provides for better delivery of services.”

Click here for exclusive channel research from Amazon Consulting.

Faxon said Digitel has also taken advantage of Cisco’s Progress Payments program, which allows a partner to start collecting payments from Cisco. At the same time, the customer does not have to pay until the project is complete.

In addition to offering technology through the leasing program, Von Seggern said VARs can leverage the program to offer additional service and maintenance contracts to end users.