Under the terms of the deal, which was initially struck in the summer, IBM Global Financing offers Avnet’s VARs Inventory Financing, a specialised commercial financing offering created specifically to help VARs take control of their finances by changing the way they pay IT suppliers.
Paul Foulkes, vice-president of IBM Global Financing, told CRN: “There is a need for this type of financing. Most VARs have banking lines that are adequate, but as their business grows, these banking lines can get squeezed. If VARs don’t have another means to finance then business could slow down and prevent further growth. Our offering allows VARs to take longer to pay while ensuring the supplier is still paid to terms.”
Foulkes added that IBM takes the credit risk away from resellers.
“The benefit to Avnet is that it doesn’t compromise its own terms and cashflow,” he said. “Resellers will get more time to pay and this will help fuel their growth.”
To date, about 10 resellers have used the Inventory Financing tool, Avnet told CRN.
Laurence Cann, credit control manager at Avnet Technology Solutions in the UK, said: “Inventory Financing fits well within Avnet’s credit control processes. It reduces the workload of credit control and credit assessment for customers that sign up. It also provides access to IBM Global Financing solutions for transactions above normal credit lines.”
Peter Austin, general manager for flow at finance and leasing firm Siemens Financial Services, said: “This is what is known as a stocking plan. It does make sense for a distributor to offer it to its resellers because it is a good way of shifting stock.”
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