D&H Extends A $10 Million Helping Hand To VARs

On the first day of the XChange conference, the SMB distribution kingpin said it is providing an additional $10 million in credit to help more than 700 of its existing VARs finance and grow their business. The new credit puts an additional $10,000 to $15,000 per month on average in the hands of these VARs, said D&H Distributing Co-President Dan Schwab. The company also plans to add $1 million in additional credit to D&H resellers in Canada.

Most D&H VARs typically have 30-day credit terms with about $25,000 monthly credit, said Schwab.

"Mortgages have been cut back, credit lines have been reduced and many distributors are taking a hard look at credit lines," said Schwab. "We're hearing our customers tell us that some distributors are cutting their credit lines. D&H has lived through multiple recessions. It is our job to stand by our customers in good times and bad."

The additional credit will be critical in helping solution providers improve their cash flow during a difficult period, said Schwab. "Cash flow is the lifeline of small business," he said. "It is the biggest challenge these small businesses face."

"Partners view us as a true partner," he said. "This is just another way we can help them be successful."

Schwab said that so far D&H has not felt the impact of an economic downturn. That said, he noted that he is concerned about ripples from the sluggish economy. "The small-business VAR and their customer base never has excess IT capacity like large enterprises do," he said. "These small businesses are still growing. That's the one part of the U.S. economy that remains strong. So we and our customers are still expecting to see solid growth."

"I am not an economist," said Schwab. "I can't tell you that we are in a recession. My sense is that certain markets are going through a difficult period and it is having a ripple effect."

Schwab said D&H has already started reviewing VAR credit lines on a case-by-case basis. As a conservative, 90-year-old family-run business, D&H has always maintained a "due diligence" credit policy aimed at identifying customers with a long history of keeping their accounts current and working with the distributor to sell new emerging technologies.

"It's a thoughtful analysis," he said. "We identify customers we think this additional credit will be beneficial to. Most of them have been with us for at least two to three years and many have been with us for five to 10 years."