Channel Capital: 10 Financing Options And Programs For Solution Providers


Whether it’s from vendors or distributors or third-party partners, there is a host of new financing options and programs for solution providers and customers. Here’s a look at some of the more recent offers for solution providers, from new leasing terms and extended, interest-free credit to payments deferral programs.

For more on financing, read the rest of CRN's Channel Financing Week content.

60-Day Interest Free Credit

While 30 days of interest-free credit used to be the norm, top vendors such as Hewlett-Packard, Cisco and Lenovo have all upped their grace periods to 60 days. Dell recently joined the pack, thanks to partnerships with GE Capital and Wells Fargo Capital Finance. Solution providers can access these credit offers through both the vendor or distribution partners such as Tech Data, Ingram Micro and others.

ATT Telecom Services Credit

It's not just the big hardware vendors that are getting into the 60-day interest free financing act. Now ATT is offering the same financing options for partners that want to sell ATT's network, cloud, hosting or mobility services. Better yet, with the launch of ATT's Partner Exchange channel program last month, all certified partners are eligible for streamlined credit approvals.

SAP 'Buy Now, Pay Later' Program

Technically, SAP's new financing offer is for customers, but it's a huge boost to partners selling SAP's on-premise, cloud and hybrid software solutions. Unveiled earlier this month at CeBIT 2014 in Germany, the "buy now, pay later" program gives small and midsize enterprise customers zero percent financing for up to 24 months for the purchase of any product on the reseller price list. The enterprise software maker said the financing offer is design to help make it easier for businesses to invest in major IT transformations. The program, which is available in North America as well as several other countries, will run from now until Sept. 30, and includes SAP software and one year of maintenance.

Emerson Network Power Leasing

Vendor leasing programs have become quite popular lately as solution providers shift more toward services and businesses themselves look to reduce their IT investments. For example, Emerson Network Power this year began offering 24- to 72-month fixed rate leasing options for data center equipment, via leasing partner First American Vendor Finance. Steve Hammond, director of global partner marketing at Emerson Network Power, said the program is designed to give partners and customers a way to upgrade data center infrastructure through lower, more manageable monthly payments instead of big capital expenditures.

Tech Data Direct Leasing

While many distributors offer leasing to their reseller customers, Tech Data also has started offering leasing directly to the end-user customer. "If we know a deal is going to be leasing ahead of time by the reseller, then we can make arrangements with the leasing company for direct payment," said Scott Tillesen, ‎Tech Data's vice president of credit and customer care for the Americas. That way, the solution provider doesn't have to worry about relaying the customer payments back to Tech Data.

Synnex Accounts Receivable Outsourcing

Sometimes, having to manage all of those outstanding customer bills can be a major headache for solution providers -- and one that can hurt cash flow. That's where Synnex comes in; the distributor now allows its VAR customers to outsource their accounts receivable to Synnex. "One of the biggest changes we've seen over the last year has been more VARs outsourcing their [accounts receivable] to us," said Bob Stegner, vice president of marketing at Synnex. "It's a big plus for VARs."

IBM Pay-As-You-Go Cloud Financing

IBM recently rolled out its pay-as-you-go cloud storage model for enterprises. Part of Big Blue's Advanced System Placement program for IBM XIV storage systems is a financed version of the offering through IBM Global Financing; the option gives qualified clients a 36-month hardware lease and software loan. Better yet, payments for the first six months are steeply reduced. While the option is for end-user customers, the financing can help solution providers get traction in the enterprise with cloud service engagements.

Floor Planning

Floor planning, or third-party financing, continues to be a popular option for solution providers seeking additional financing from their distribution partners. For many VARs that carry a lot of product inventory, they can obtain credit from third-party financiers by borrowing against their inventory. Major distributors offer floor planning options through such finance partners as Wells Fargo, GE Capital and IBM Global Financing.

Financial Education Services

For many solution providers, distributors are still the top destination for financing options and credit. But major distributors today are taking that a step further with additional education services to counsel VARs on how to better their financials. According to Tech Data's Tillesen, these services are crucial for VARs transforming their business models. "We offer guidance on how, for example, solution providers can improve their credit profiles as well as ways to build better relationships with creditors," he said.

Cisco Full Payout Lease

For businesses that want to lease IT hardware at lower monthly payments but also want to own some equipment at reduced costs, Cisco offers the best of both worlds. Through finance leases, or full payout leases, customers can lease data center equipment for several years, consuming IT as an operational expenditure instead of a bigger capital expenditure. Then, at the end of the lease term, customers can own the equipment and eliminate the hassle of having to bring in new infrastructure.