Westcon Group has launched a financing offering for resellers covering hardware, software and services.
The distributor’s chief finance and operations officer Asia-Pacific, David Corcoran, said the aim of Westcon Group Capital was to assist resellers to close customer opportunities. The initiative has been in the works for the past year, and complements like-minded offerings in the US and UK.
“Our aim was to come up with an offering for the channel which would make it easier for everyone to close opportunities with their end users,” Corcoran said. “It’s very opportunistic that we’re launching this at the moment – it wasn’t prompted by the economic climate. But the more we saw happening in the market, we knew this would have a high profile when this hit the ground. It’s not easy to get this up and running.”
“Particularly, in the market at the moment, capital is everything, and credit is everything. And it’s getting stretched left, right and centre… It’s our job to help those resellers.”
Westcon Capital can be used for commercial rental and finances leases, master rentals, sales and rent back, staff and school programs and insurance. The funds can be used across the distributor’s full vendor portfolio and for a combination or specific hardware, software and services sales over 3-5 years.
Corcoran said terms and conditions, including interest rates, will depend on what the offering entails, the customer and deal value.
It is open to any reseller trading with the distributor who registers for the program.
“The beauty of it is that more and more organisations want to rent equipment, not own it. The market looks at it as a long-term investment. You need to use long-term capital for those investments – you don’t want to use your own working capital in the business, because it’s important – it’s crucial now that organisations are liquid.
“This will help the smaller organisations, as well as the larger organisations who don’t want to use their liquidity.”
Westcon Capital will finance customers for up to $40,000 without credit information, and provide automatic credit of $250,000 to education customers, and unlimited automatic credit for government agencies.
Corcoran said there was no limit on the amount of finance available.
“The end-user will ultimately decide on renting or leasing the equipment, and the cash will flow between the customer and reseller and then from the reseller to us,” he said. “In some instances, the reseller may decide the money comes straight to us so it doesn’t affect their accounts.”
Westcon Capital is underwritten by Technology Fund Management, and offers six lines of credit from various organisations. Westcon will provide end-of-term notification to resellers up to six months before the end of rental and leasing contracts.
According to a new IDC report , the technology leasing and financing reached almost $2 billion in 2008, or 7.2 per cent of the overall IT spending. This share is expected to grow to 9.6 per cent by 2011.