The credit crunch has had a more severe impact on finance in the channel than the general UK market, new research has suggested.
According to Siemens Financial Services (SFS), 18.5 per cent of IT and telecoms firms have had their bank credit limits cut this year, compared to a UK average of 8.7 per cent. Some 29.6 per cent reported a rise in their borrowing costs, compared to 25.3 per cent for the overall market.
SFS also suggested worse is to come. Some 27.8 per cent of respondents in the IT and telecoms sector said their bank had told them to expect further interest rate hikes, compared to 15 per cent overall.
Peter Austin, general manager at Siemens Financial Services, said: “A decreased access to credit is being felt across all sectors.
“Unfortunately, the IT and telecoms sector has closer links with financial services than other areas and as a result is suffering a knock-on effect.”
Austin claimed the IT channel is increasingly turning to asset finance to ensure potential clients are not lumbered with huge upfront costs.
Some 22 per cent of IT and telecoms firms expect to increase their use of asset finance during the remainder of 2008, compared to a UK average of just 13.4 per cent.
Robert May, managing director of VAR Ramsac, said: “We have not been affected, but I can see how credit cuts are becoming a reality for some of the smaller channel players.
“Cash and cashflow is king resellers need to start asking for larger
deposits, instead of just relying
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