Wells Fargo Makes Channel Financing Push

The Supply Chain Finance team at Wells Fargo Capital Finance was first created in 2012 after the company had purchased Castle Pines Capital back in July 2011. Founded in 2004, Castle Pines had focused solely on channel financing programs. Over the past two years Wells Fargo has grown since the acquisition to include more financing options, said Hopkins. 

"We are not just their channel financing provider, we're also their bank," said Hopkins.

The Supply Chain Finance team's experience and understanding of the channel benefits resellers like Varrow, said Weiss.

"They are not just bankers," said Weiss. "[Wells Fargo] understands the challenges of the solution provider and it's great to have somebody that came from my industry to understand the challenges of the industry.

With the acquisition, Wells Fargo would be filling a void by providing channel financing options, said Hopkins.

"From the economy standpoint, we went through different changes from 2007 and on, and it made vendors realize terms were important," said Hopkins. "Liquidity wasn’t good as banks weren’t lending and the SMB space was tougher, but we didn’t change our principles."

Currently, Wells Fargo's reseller customers are looking at different avenues for the recurring revenue and are adjusting to managed and cloud services, said Hopkins.

"If we look at our typical reseller base they are selling to enterprises or the government, which are down and looking to save money," said Hopkins. "Resellers need to be smarter in terms of packaging solutions to return the same level of profitability."

While many solution providers are shifting more to consulting, cloud and managed services and selling less hardware and software products, they still need financing support, Hopkins said.

"Some are making healthy margin on equipment and some aren't," said Hopkins. "Wells Fargo is indifferent whether it's a SaaS purchase or hardware, it's dependent on the risk level of reseller and how good their receivers are. So as the mix continues to change, we are conscious and aware of it."

Following its partnerships with Dell, which specializes in hardware, and, AT&T, whose core business is telecom services, Wells Fargo will continue to dive into other IT market segments, said Hopkins.

"We will be across the board and focus on networking, software, more services and storage," said Hopkins. "We will continue to look at our resellers, who their vendor partners are and have a good impression of where they are moving to next."