IBM is rolling out a new set of financing options that it hopes will increase its sales to SMB (small and medium business) customers by simplifying the financing process.
Dubbed IBM Financing Advantage, the initiative brings to a wider market several financing programs IBM has previous offered in small test channels. Available to IBM's direct sales force and to business partners, the program offers simplified rates and a credit check process that allows deals of up to US$300,000 to be approved and issued a contract within one hour. Partners will be able to use the program, and IBM's financing department, to finance IT deals even if they include no IBM products and services.
IBM Global Financing Worldwide SMB Sales and Marketing Director Chuck Thomas said Financing Advantage encompasses three distinct initiatives: A pre-approval option, akin to a pre-approved mortgage, that lets salespeople clear a line of credit for prospective customers; an "auto-quote" program that generates credit pre-approvals and dynamically modifiable contracts for opportunities registered in a sales management system like IBM's Siebel deployment; and a rapid financing initiative that enables quick generation of a credit approval, price and contract for a potential deal.
IBM began offering the rapid financing option in September to certain U.S. partners for eServer deals. Since then, it has approved credit for 94 percent of prospective customers and issued a price quote and contract within an hour 92 percent of the time, Thomas said.
IBM Financing Advantage will be available in the U.S., U.K., Australia, Canada, France, Germany and Japan. The program covers all IT hardware, software and services.
Business partner Mainline Information Systems has participated in IBM's pilot test of its financing options and finds the new programs a useful competitive advantage. "This allows us to get out front and get a customer answers a lot quicker," said Chief Financial Officer Gary Huff.
Huff sees the new options as part of IBM's deepening commitment to and reliance on its channel. "We've seen many changes where they're pushing more and more of the sales process out to the business partners," he said. "That's good for us, and good for IBM."
IBM's Thomas said the new financing arrangements are aimed at meeting the needs of small businesses with limited resources. "While you have to have competitive rates, having speed and ease of use is the most important thing," he said.