Vendors Step In Where Bankers Fear to Tread?
Can vendor financing help thaw your frozen information-technology budget? If you need new technology but money is a problem, you might want to consider reaching into the deep pockets of cash-heavy tech vendors.
As bank lending tightens, more small companies are expected to turn to manufacturer and vendor financing for their IT investments, according to Access Markets International Inc. An AMI survey finds that 17% of small companies say they went this route in 2007, compared with 5% in 2006.
For this trend to continue and the forecast to bear out, tech companies will need to be in a position to offer financing. Recently Dell Inc. began rethinking its options for providing financing to small and midsize business customers after its partner, commercial lender CIT Group Inc., scrambled for cash, reeling from the fallout of the subprime-mortgage crisis. How other technology companies weather the crunch remains to be seen.
Readers, what do you think? Is vendor financing looking better to you nowadays? How do its pros and cons play out for you?
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