IBM Offers Zero Percent Financing, Deferred Payment Options

IBM is offering customers an expanded range of financing options through the end of the year, including zero-percent financing on IBM software products and deferred payments for 90 days on IBM hardware, software and services, the company said Monday.

Channel partners will be able to offer the financing options to their customers in a move that will help them generate more business. "We help our partners win more, sell more and better manage their cash flow," said Jay Holbrook, director of channel financing, in an interview.

The new options are the latest in a number of aggressive financing plans IBM has offered to help stimulate business during the economic downturn. Earlier this year the company offered $5 billion in low-cost financing for what the company called "smart infrastructure projects" covered by economic stimulus funding from governments in the U.S., Europe and Asia.

Under the new "Smart Financing Toolkit" unveiled Monday, customers can defer payments for 90 days on eligible hardware, software and services, followed by a 36-month payment plan or lease. The offer covers pre-owned IBM equipment as well as new products, according to the company.

The zero-percent financing, available in most geographies around the world, is good for IBM Software Group products and services valued at $5,000 and up over a 12-month term. Also available is competitive financing for multi-year licensing deals, including zero-percent for three-year contracts, for most IBM Lotus products.

The financing options can be leveraged by IBM resellers, Holbrook said. IBM is also providing partners with interest-free financing of their own for up to 75 days, he said.

IBM's financing options have helped business partners improve their chances of winning competitive deals by 36 percent, Holbrook said, citing a study conducted by IBM's Systems and Technology Group. And customers in those deals who are eligible for financing on average spend 30 percent more on products and services over the length of the deal.

And resellers improve their cash flow because while it may take between 45 and 60 days for IBM to collect from the customer on a deal, IBM make payments to channel partners in five days or less. "This makes the partner more profitable and healthier financially," Holbrook said.