IBM Global Financing Adds $2B in Stimulus-Related Credit
Big Blue hopes to encourage investment in IT infrastructure projects in anticipation of federal recovery funding.
In recent months, a number of IT vendors, including Dell, HP, IBM, Lenovo and even distributors such as Tech Data have attempted to pry open locked IT budgets by offering favorable financing options for customers and channel partners.
Now IBM Global Financing, which last October and again this past February introduced new technology financing offers, is urging customers to move forward specifically with IT infrastructure projects, bumping by $2B the amount of credit available for initiatives in key areas such as smart grid, healthcare information technology and broadband access.
Company officials said that the move is intended to spark IT projects that may be waiting for stimulus money as provided by the American Recovery and Reinvestment Act (ARRA). But funding under the ARRA may not arrive for another year or two and IBM figures that by extending credit options to customers considering IT solutions in areas mapped out by the stimulus package it can speed up the timeline for technology purchases.
The idea is to accelerate projects where our clients may be waiting for a grant or have some budget challenges, said Joyce Blackwell, vice president IBM Global Financing. We understand that credit is still very tight in the market right now and our clients are watching budgets and capital expenditures closely. Our intent is to extend credit to our clients in a way thats flexible and matches their needs with budget and cash flow.
IBM provides some $40 billion in annual financing to customers for leases and loans, about 20 percent of which originates through the vendors channel partners. For referred financing deals, IBM pays partners fees ranging from .25 percent to 1.5 percent of the total amount financed.
Blackwell said that the new financing package arms channel partners with an additional mechanism to close sales. She noted that the vendors channel partners and customers are finding it difficult to obtain credit for IT projects in the current economic climate and that the process is arduous and involves close financial scrutiny.
We look at partners as an extension of our sales team, she said. The $2 billion is offered to any credit qualified customers whether they come through our partners or our sales team.