Westcon Hikes Financing Limit For Voda One Customers

Though Westcon executives declined to say how much VARs can finance now through the company's Advanced Funding Leasing Program, one of its IQualify financing programs, the ceiling is now four times higher, enabling partners to make bigger deals without having to lay out more cash.

"The intent is to help them with working capital, help them with cash flow, help them to be more profitable," said Steven Bernard, vice president and general manager of Voda One, the Tarrytown, N.Y.-based specialty distributor's Avaya arm. "Our whole focus is on how we make it easier to do business with the reseller and broaden their ability to grow. When you're growing as a business, obviously you need a lot of flexibility in financial terms. Their goal is to keep the lights on, pay their bills and collect money from their end users. We want to make that as easy as possible for them."

Leasing does help business, according to Steve Melchiorre, director of sales at Converged Communications Systems, an Evanston, Ill.-based solution provider and Voda One customer. Converged Communications leases about 60 percent of its projects, with between five and 10 new system sales each month, Melchiorre said.

"We like to have as many people as possible lease because it's an easier sell. We feel that technology, with the way that it's going, it's better for customers to do a five-year fair market lease," Melchiorre said. Besides giving Converged Communications Systems a foot in the door to make another sale when leases come to term for the customer, "it keeps all of their options open," he added.

Between 15 percent and 25 percent of Westcon Group's VAR customers take advantage of its financing programs, said Chuck Thropp, CFO of Westcon Group, North America.

Thropp outlined several benefits for VARs that choose to participate in Westcon Group's financing programs. Under the Advanced Funding Leasing Program, transactions and purchases done by VARs are considered separate from their regular credit lines with Westcon Group, keeping cash in the VARs' pockets, he said. Leasing also will allow VARs to handle larger sales and let them focus on their business, not on making sure they get paid.

"It takes the VAR out of the collection business," Thropp said. "Usually when they sell product to the customer, they have to worry about getting the cash from the customer, and in this case the VAR is going to get paid directly by AFS [Avaya Financial Services]."