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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."