Computer 2000 (C2000) has started offering credit terms to 800 of its smaller reseller customers as part of its drive to crack the SME sector.
The broadliner is set to make £4m of extra credit available to the channel and increase the number of credit lines it manages to about 5,000.
Phil James, finance director at the broadliner, said: “We have between £300m and £500m of credit available to the channel. Although £4m is not a huge dent in that, it is a significant piece in the smaller market to help smaller businesses develop.”
James said the extra credit will be funnelled into resellers that spent more than £1,000 over the last quarter. Although they will typically be offered a £5,000 credit line to begin with, C2000 intends to increase each facility as the reseller grows.
“It is critical for us to start building relationships with these customers,” James said.
Robert May, managing director at VAR Ramsac, said: “In our early days, credit was our biggest barrier to growth. Unless you can get the customer to pay up front you’re in a position where you cannot accept business.”
May added that he understands why distributors have been nervous about offering credit to smaller resellers due to the high rate of failures among start-ups in the sector.
Eddie Pacey, director of credit at distributor Bell Micro, said: “We did this on at least two occasions last year, once guaranteeing an opening line subject to payment by direct debit and the second time, a general uplift of credit lines that created some £10m of extra credit facility.
“Providing these lines is easy, getting VARs to use it is altogether tougher. It is not just about credit, but support on a range of services.”
Bell VARs will score with credit bonanza