Going For The Gold

FINANCING MAY NOT BE as interesting as the latest gee-whiz technology, but it’s just as integral to an IT provider’s livelihood. “We can’t survive without it,” says Kirk Cole, owner of NuMega Solutions, a reseller that serves government contractors and agencies out of its headquarters in Alexandria, Va.

By enabling businesses to make large technology investments incrementally, financing helps IT providers land more and bigger deals. In fact, financing boosts deal sizes by an average of 20 percent, according to Michael Berg, president of lending agency Churchill Technology Finance LLC. Ready access to leasing can also inspire customers to close deals sooner. “We shorten up the purchasing cycle,” says Berg, who is based in the company’s Syosset, N.Y. office. “You lose a good percentage of business when you walk out the door without a signed contract. If you offer financing right there on the spot, oftentimes the deal is done [immediately].”

Perhaps that explains why IT equipment leasing has grown to $40 billion a year, up 67 percent from three years ago, according to the Equipment Leasing and Finance Association, in Arlington, Va.

Yet many smaller VARs and solution providers complain that credit is hard to find. On the contrary, plenty of money is available from distributors, vendors, banks, and other finance organizations, provided that you establish a history of timely payments, keep your finance partners informed about changing cash flow patterns, and educate your finance contacts about your business plan.

“If they are open with our credit analysts, we can usually help them,” says Kelly Carter, director of credit at distribution giant Ingram Micro Inc., in Santa Ana, Calif. “Get to know us.”