Tech Data Financing Gives Small VARs A Boost

Columbus, Ohio, solution provider XTEK had a potential desktop computer sale to a local law firm but couldn't put the deal through because the three month-old company lacked the financial clout with Tech Data. A nudge from the Clearwater, Fla.-based distributor's finance team, however, put XTEK in touch with IBM via its IBM Flexible Credit program, launched late last year.

In about 15 minutes, XTEK was approved for a $500,000 credit line using IBM's online application, the maximum under the Tech Data/IBM program, said XTEK vice president Susan Harrah. Now XTEK is in a whole new league, since the law firm buying the desktops is moving offices and needed $100,000 in new IT equipment for the task, she said.

"I was going to pass that on to another reseller I work with, and now I don't' have to. It's a huge deal for us," Harrah said. "It essentially gives us unlimited buying power."

XTEK also is considering hiring sales reps now that it can follow through on potential sales, Harrah added. "We weren't going to hire sales reps for fear they would get out there and get in front of a small or medium business that needed 100 desktops," she said. "That's not an issue for us anymore."

For new VARs, IBM is offering an additional 15-day credit extension during January, said Scott Tillesen, Tech Data's director of SMB credit. For the distributor, the financing package enables it to hold onto solution providers customers that may have defected to greener credit pastures or those like XTEK that were off its radar screen, Tillesen said.

Also this month, Tech Data is working with Sony to promote its line of Vaio notebooks to SMBs by offering 60-day extended payment terms to its TechSelect VAR network.

"Part of our objective is to help our business customers find unique ways to sell that product, which has a tendency to become fairly commoditized," said Leslie Malone, director of client computing at Tech Data. "It is a very competitive piece of our business. We've been identifying those customers -- particularly in the SMB and mid-tier space -- that would benefit from additional programs and services from the desktop/notebook/handheld market."