Cutting in on financing options

Resellers should look to provision of financial services alongside the supply of products and services, writes Eddie Pacey

There have been many articles published about financing options available to the channel - in particular, resellers. They allow a reseller to bid, win and fulfil large contracts that would otherwise be beyond their scope of funding.
Distributor credit is the first choice and it is free, but when the credit line availability is limited or the terms granted to the end user exceed those granted by the distributor, something must plug the gap. Distributors work closely with the channel and allow excess over lines - they even support on extended terms, but this is not guaranteed.
It is accepted that many resellers do not have the time, expertise or understanding of the full benefit in offering bolt-on finance and leasing options to their quotation or sale discussion. Many have openly admitted this is not viewed as part of their service offering.
It is here that distributors need to inject the value-add and sit alongside the reseller, selling the various options available to the end user and extending this service to support and guide the reseller in funding the deal when the end user offering is declined.
With strategic partnerships established with selective finance and leasing companies, credit insurers, brokers, vendor finance partners and those prepared to consider one-off inventory funding, distributors are equally well placed to support the channel in these business areas. Some have more refined organisational set-ups
and dedicated financial service offerings that support deal fulfilment and advice.
If there is one minor criticism of the channel it is that many do not see this as an integral part of the supply chain. In deciding who to partner with in terms of supply, they must look to provision
financial services alongside the supply of products and services.
Looking at all the elements of the deal ensures a faultless delivery and locks partners in the transaction to committed future dealings. Given there are also opportunities for the reseller to maximise return in provision of financial solutions from those introduced to the deal - by way of commission and continued return on occasions - it seems incredible that many do not recognise the benefit of these offerings.
Eddie Pacey is director of credit services Europe at Bell Micro.