Dell looks to make channel financing a growth tool
Newly private firm opens new financing options up to channel in the UK, US, Canada, Germany, France and Ireland
Dell is teaming up with financing heavyweights to give partners looking to invest in their own growth some more attractive credit options.
This week, Dell Financial Services announced it would be joining forces with several preferred financing companies to provide improved access to working capital for Dell solution providers worldwide.
The credit arm of the Texas vendor will be working with GE Capital Commercial Distribution Finance in the US, Canada and Europe, Wells Fargo Capital Finance in the US and Canada, and IBM Global Financing in Europe to offer more flexible repayment terms and more responsive credit limit increases for qualified solution providers in the UK, US, Canada, Germany, France and Ireland.
"Dell continues to create and deliver added value to the PartnerDirect programme, making it easier for our partners to bring more solutions to customers," said Cheryl Cook, Dell's vice president of global channels and alliances.
Cook added that the programme improvements are meant to ensure that "both partners and customers can access the capital they need to build infrastructure and invest in their businesses."
The programme offers qualified Dell channel partners interest-free repayment terms for up to 60 days; larger lines of credit; and 24/7 online account management and reporting tools. Dell expects to expand the improved credit and financing programme to 28 more countries in Europe, the Middle East, Latin America and Asia expected later this year.
"We are pleased that Dell and Wells Fargo have established an extended terms channel finance programme that helps support our innovative IT solutions," said Harry Martin, president and CEO of Intelligent Decisions, a US-based Dell partner.
"Dell's extended term financing is the type of creative solution that allows us the flexibility to pursue our strategic initiatives and meet the needs of our customers."
Channel-focused efforts to loosen financing and credit terms are vital for partners who often find their ability to grow hamstrung by a lack of investment capital.
Studies by The 2112 Group have found that more than 80 per cent of the channel relies on cash flow for its growth investments, essentially paying for new products, partnerships, training and staffing from the same funding source as existing operations and fixed expenses. That can lead to stagnation in a growth-challenged and risk-averse channel.
Just one third of solution providers, meanwhile, are using a bank line of credit for future growth investments, but these pressure these instruments can put on solution providers frequently forces a focus on short-term performance over long-term growth. These short-term credit infusions produce momentary sales increases, but do little to improve the fiscal health or sustained vitality of solution provider organisations.
"As a leading channel finance provider, we are very pleased to be one of Dell's top channel finance providers to improve liquidity for their channel partners," said Steve Hopkins, senior managing director for the supply chain finance group at Wells Fargo Capital Finance.
"We look forward to supporting Dell and their commitment to their channel partners as we work together on providing financial solutions to enable growth."
As part of our special editorial partnership, CRN is publishing this article from Channelnomics.