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04 Sep 2006
Deep-pocketed distributor Bell Microproducts Europe is injecting millions of pounds worth of credit into the UK channel, in a move to help VARs climb the credit ladder.
The distributor has been ramping up its credit lines since April, when it revealed a £14m credit boost for its existing resellers (CRN, 17 April). Last week, Bell announced a £10m cash investment as it continues its uplift of mid-range lines. This means channel partners with an existing £5,000 credit line will see that doubled to £10,000, and £10,000 lines will be doubled to £20,000.
Bell is also offering new resellers, regardless of size or age, a £5,000 credit line on the condition that they fill in a direct debit mandate. Then, in three months, the line could be doubled to £10,000. Bell expects to create 500 new accounts as a result.
Talking exclusively to CRN, Eddie Pacey, director of credit services at Bell, said: “With new account applications many businesses have not been around long enough to establish a pattern of ratings, so they are more likely to be refused credit. This initiative will help smaller and newer firms get their foot on the credit ladder.”
Pacey said firms will still have to undergo an ID check to combat the ever-present threat of fraudsters.
However, Nick Tiltman, director of credit services EMEA at Computer 2000, said his firm already has a similar offering.
“This kind of scheme spreads any credit risk, and the margin rates in the SME sector are generally better, so the chance of attrition is low,” he said. “The only risk would be if every distributor launched a similar offering, and small VARs get too many lines of credit.”
Mark Hatton, managing director of distributor Sphinx, said: “It will be interesting to see how many resellers are prepared to give Bell a signed direct debit mandate, because it means Bell can take money directly from their account.”
Kieran O’Connor, external sales manager at VAR acs, said: “This is a positive step for smaller resellers that want to engage with Bell’s product portfolio.”
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