Nortel, IBM Financing Team Up For Reseller Credit Offering

According to John Stasick, Nortel's channel manager and development leader, eligible Nortel resellers can now receive commercial lines of credit to purchase Nortel communications gear. The new program is sponsored by Nortel Enterprise Financing Solutions (NEFS) and will be offered by IBM's lending and leasing arm, IBM Global Financing (IGF).

"Simple and flexible financing has become a key enabler for resellers in the telecommunications channel," David Wilkinson, Nortel vice president of channel strategy and inside sales, said in a statement. "This interest-free opportunity designed within the Nortel-IBM financing program will provide strong incentive to qualified resellers looking to hit their 1Q08 sales targets."

Currently open to the U.S. and Canada, resellers who apply for and receive an IBM Global Financing Line of credit will receive 60 days of interest-free financing for all Nortel enterprise products and services bought from Nortel-authorized distributors, including Ingram Micro, Ingram Micro Canada, Synnex, Tech Data Product Management, Tech Data Canada, Westcon Group North America and Westcon Canada System, and financed on the VAR's IGF credit line.

Mario Bernardis, vice president of commercial financing for IGF said Nortel resellers can apply for lines of credit to purchase the vendor's products and services via the Web through a recently launched IBM Flexible Credit online financing tool. Applications can be processed online for credit lines up to $500,000. VARs wanting higher credit lines must inquire about IGF's Inventory Financing programs.

"It's a simple program for small partners," he said. "It gives them small credit lines in a simple and quick way."

Using IBM Flexible Credit, resellers can use flexible payment options for Nortel wares. Usually, resellers can receive no-interest payment charges for financing period of 30 to 45 days. With the new offering, however, Nortel is lengthening that period to 60 days, and unpaid balances will accrue a low, competitive interest rate per month with additional repayment options.

Nortel and IGF will also make available a PDF version of the agreement, meaning VARs can review it as part of the application process. It can be electronically signed with one click. Using the Web-based application can return an approval or denial in minutes, Bernardis said.

Stasick added that financing options help resellers expand their communications product offerings and helps them gain competitive ground.

Wade Griffin, president and CEO of Pyramid Communication Services, a Carrollton, Texas-based solution provider, said the new credit and financing option "helps take the pressure off" of partners. He said many customers have different payment schedules to VARs, some paying in stages throughout the project, some paying in full at cutover. Typically, he said, when he orders VoIP and communications equipment, the invoice is due within 30 days of shipment, but often times the customer has not paid within that period, causing interest to accrue.

"Basically, what happens from the time it ships before you really start the physical implementation it takes 30 to 45 days," he said. "By the time you get any funds in, your bill is currently due."

Having an extended interest free payback period can improve cash flow, Griffin said.

"It allows us to do more business with the same amount of operating capital," he said. "For 90 percent of partners, that's going to be a boost."