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Other IBM partners think the moves could benefit them because VARs selling competing platforms now have to seek alternative credit suppliers.
"The entire mission of IGF is to facilitate the movement of IBM products to market. And in this economy, with the money that's available, it makes sense IGF does that. Their mission is to sell IBM products, not be a bank," said David Stone, vice president of business development at Solutions-II, Littleton, Colo. "This should be a great thing for IBM resellers. If we get the funding, we can sell more products. IBM is trying to drive loyalty with its resellers. They, like everybody else, are adjusting their programs to drive loyalty."
Meanwhile, Textron's board of directors approved a plan on Dec. 22 to exit all of Textron Financial Corp.'s finance business except for financing of customer purchases of Textron-manufactured products, resulting in the loss of credit lines of many solution providers.
Several distributors, including Ingram Micro and Arrow Electronics, partnered with Textron to provide financing to solution providers. Textron executives could not be reached for comment.
George Usi, president of Sacramento Technology Group, Folsom, Calif., used to finance nearly 100 percent of his sales through Textron, especially in the public sector market. Last month, he got a certified letter saying his credit was being discontinued at the end of February.
Usi quickly scrambled to secure two lines of credit with De Lage Landen Financial and GE to replace the Textron line. He was able to match the line he had with Textron, but he fears other solution providers will end up with less credit than their Textron lines due to the economic crisis. "We've [diversified] our business model. We do quite a bit of managed services. In my opinion, that helped when we were going through the financial review process," Usi said.
Usi also fears that new companies will face additional hurdles to secure credit in the current environment.
"They don't have the relationships, the history. It'll be tough for them to enter the market. This is going to stymie innovation. There were will fewer entrepreneurs, less competition," he said.
Arrow executives declined to comment on Textron, but the company issued a statement that said it was working with Textron and its resellers to support them through a transition period.
"Given Arrow's extensive portfolio of commercial financing programs and our diversified base of more than 700 suppliers and 140,000 customers worldwide, Arrow ECS was able to quickly transition our resellers that previously were engaged with Textron to our other commercial financing suppliers," the company said in the statement.
Ingram Micro's Kelly Carter, director of credit, said the distributor was helping Textron borrowers secure alternative lending sources and, in some cases, increase their Ingram Micro credit lines. "We've been very proactive on this front from the get-go and are working with partners as we speak to keep their businesses running as smooth as possible," Carter said in a statement.
Tech Data did not have a formal relationship with Textron, but the Clearwater, Fla.-based distributor still faces the challenge of trying to help VARs replace disappearing credit lines, said Scott Tillesen, director of SMB credit at Tech Data. "We're sensitive to the fact that these guys leaving creates a little bit of a void," Tillesen said.
Next: Tech Data Will Unveil Two New Financing Partners