Customers Say No to Credit Offers, Leases

IT distributors and IT vendors have been quick to promote new financing, credit and leasing programs during the current recession. After all, it was the big credit crisis and subsequent Wall Street meltdown that seemed to start this whole mess. But all you have to do is look at everybody’s quarterly earnings reports to see that it hasn’t really made much of a difference. Why is that?

One large infrastructure solution provider, Lilien, says that its customers have expressed even less interest in leasing programs during the recession. If they don’t have the cash to pay for it now, they won’t buy it. And they generally don’t have the cash to pay for it now, says Bret Osborn, executive vice president at Lilien, which operates in Northern California, Oregon, Washington and Hawaii.

Osborn says he would have expected more interest in buyback-type financing/leasing programs that give businesses cash out to spend on what they need, even though it raises monthly payment amounts.

But that hasn’t been the case, and he’s not sure why. It could be they have some other financial exposure, he says. And because they don’t want to lease, customers are delaying deals. “For whatever reason, they have decided they are not going to put these purchases on a lease basis or financial payment stream.”