Resellers need to bolster their financing options for mid-sized firms this year as borrowing pressure is set to increase in the sector, Siemens Financial Services has warned.
Siemens’ latest research of 3,500 medium (50-249 employees) and large (250+ employees) UK companies has revealed that financial pressure from the cost of borrowing has gone up for medium-sized firms, and is decreasing for larger companies.
Howard Dudley, head of sales at Siemens, said: “The research has shown that although organisations are feeling the pinch, they still have a strong desire to invest in IT to gain a competitive edge, so resellers need to try to work with customers to find a way to help them purchase new equipment without damaging their cash flow, such as leasing.”
However, Siemens has estimated that financing is only used in 20 to
30 per cent of all IT deals, compared with 90 per cent in the print and imaging market.
Asked whether it was a question of education, Dudley replied: “I think resellers understand the benefits of financing, but they haven’t understood how to apply it. VARs often find out after the sale has closed that the customer sorted out its own finance, which is a missed opportunity.
“The good news is that resellers are very open to change and are asking us to help them put value back into their propositions.”
Robin Barker, a director at reseller Blueloop, said: “It’s been quite traditional for corporates to use leasing, but it is becoming more prevalent among SMEs. Leasing has to be an option in a VAR’s sales armoury.”
Philip White, sales director at leasing company Syscap, said: “VARs need to offer finance up front. Customers use finance in other parts of their lives, such as mobile phone contracts or car leasing, so it should not be too hard to get it into that mindset for their business purchases.”
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