IBM revises Var credit offerings

IBM is expanding its reseller credit provision in an attempt to profit from banks' ignorance by providing capital to a consolidating market.

The vendor will move beyond basic reseller facilities, such as leasing and inventory funds, to provide dealers with lines of credit for anything from tendering larger contracts to acquisitions. According to Jonathan Morris, EMEA director of IBM remarketer financing - the part of Big Blue's global financing arm that looks at reseller activities - the vendor will now provide working capital as well as accounts foreseeable financing.

The decision has come in the wake of a $300 million financing deal between IBM and US-based Hartford Computer Group, in which the dealer intends to use $40 million of the loan to fund selection and acquisition of a reseller.

Morris said the vendor was happy to examine different financing situations, if they help business partners. 'Channel partners are getting more sophisticated and therefore their financing requirements are changing,' he commented.

He added that the financing terms would be competitive to those offered by corporate banks. 'We wouldn't offer this kind of service if we couldn't be competitive to banks' rates. Our knowledge of the IT industry would also be an advantage to us. That is our knowledge of assets, acquisitions and working capital,' he said.

Morris also said funding would be available to non-IBM partners, pointing out that the company already funds up to 150 such manufacturers and suppliers in the US.

However, he conceded that: 'If the company does sell IBM products then the relationship is likely to be stronger.'

Morris stressed that the vendor was not setting up against banks. 'We are more reactive than proactive in that respect. But if IT partners do not get enough help from financial institutions, then we will step in,' he said.