D&H Extends Lines Of Credit To Fuel Growth Of 5,000 Channel Partners

"It's actually a two-pronged approach," said Dan Schwab, vice president of marketing at at the Harrisburg-based distributor. "One, we're making it easier for them to get the credit. Secondly and more importantly, we're increasing their credit availability."

D&H initially sought to extend more credit to 1,000 solution providers but saw that more customers needed help, said Joe Chaudoin, director of credit and financial services at D&H.

"Our customer base is being squeezed because of the economy. They find their capital is restricted because their business margins are deteriorating. If they go out and bid for an opportunity, they don't have the working capital to finance it themselves," Chaudoin said.

Credit has become a more important issue to solution providers looking to service customers, said channel executives. Ingram Micro recently cut the credit of some solution providers but may increase other customers' lines. Other distributors haven't made big changes but said managing credit is a complex process they don't take lightly.

At D&H, solution providers' financing terms should not change with the increased credit lines and in some cases customers that were required to pay cash on delivery (COD) will be extended net terms, Chaudoin said.

"It would be a great help to us. We've had our credit lines increased by them in the past," said Larry Souza, president of Maximum Micro, a South Yarmouth, Mass.-based solution provider.

D&H is funding the increased lines itself, not through a third-party financier, Chaudoin said.

Changes in credit lines are based on payment history and length of business with D&H, Schwab said.

"Basically, if they're good customers, they'll be able to grow their business with us. Their [existing credit limit wasn't in the decision-making process," he said.

In addition, D&H plans to introduce an electronic payment method for COD customers next month that will reduce fees, Chaudoin said.

"COD customers are an important part of our business, and we want to help them grow their business," he said. "COD Saver allows electronic payments with the help of Bank of America. You have a couple days after delivery [to pay instead of paying on delivery."