Cisco's new three-year, zero percent financing program for U.S. SMBs should help partners accelerate their SMB sales coming out of the recession, according Maryann Von Seggern, director of worldwide channels development for Cisco Capital, the vendor's wholly owned financing arm.
"One of the big pushes last year was to help partners with working capital. Customers were not only delaying orders, they were also delaying payments, and we saw a real opportunity to leverage the Cisco balance sheet," Von Seggern said in an interview Monday. "The mindset is now on accelerating -- not just making it through [the downturn] but focusing on accelerating out of it. So what we're going to do is focus on uncovering customer demand as a major initiative for 2010."
The new program, formally announced Monday, offers new financing terms for Cisco channel partners focused on SMB. The program covers purchases from $1,000 to $250,000 and spans the entire Cisco portfolio, including hardware, software and services. Customers lease whatever they buy, financed for a 36-month period with no interest paid to Cisco, and then own it.
"If partners aren't taking advantage of this, they're absolutely leaving money on the table," Von Seggern said.
SMB customers that buy a Cisco Smart Business Architecture (SBA) can qualify for three-month payment deferrals.
The program goes into effect Monday and is available through Cisco Certified partners until July 31, the end of Cisco's fiscal year. The financing isn't available through service providers or in public sector accounts.
Cisco solution providers praised the program, especially for its flexibility.
"I have long been a strong supporter of lease financing as having real value in supporting IT spend," said Daniel Serpico, president and former CFO of FusionStorm, a San Francisco-based solution provider, in an e-mail to Channelweb.com. "The fact is, leasing allows for companies to dramatically improve their cash flow, thus make major investments, with immediate ROI. Now that Cisco Capital is offering 0 percent financing, there's no excuse not to finance."
The fact that Cisco cast its financing net to include software and services, Serpico suggested, should drive healthy interest among Cisco VARs.
"With their willingness to support traditionally soft assets -- i.e. maintenance contracts, professional services and software -- are you kidding me? Everybody should be leveraging this tool to increase IT investment and help their business grow," he wrote.
"Clearly, based on the scope and breadth of this promotion, Cisco and Cisco Capital feel compelled to move early and aggressively at a time other IT providers are pausing to assess the 2010 outlook," wrote Joe Pucciarelli, program director of Technology Financing & Executive Strategies at IDC, in a Monday research note.
"Given the modest growth outlook in the U.S. and most mature economies,, and demonstrated tightening of a critical source of capital for mid-tier companies, Cisco Capital's move seems especially propitious," Pucciarelli suggested. "Promotional programs for resellers are more complex to launch given the number of moving pieces. Having a decisive, broadly-based program at the beginning of the calendar year, and a six month time span, allows the time for the inevitable inertia to be overcome."
